Nevada Rules Daily Fantasy Sports Illegal; Bans Sites From OperatingPublished October 25, 2015 by Elana K
Nevada has just joined the ranks of 5 other states in ruling that daily online fantasy sports is illegal. Site operators have been told to stop offering services immediately, but are invited to apply for licenses through Nevada's Gaming Control Board.
Amid growing debates over the legality of daily fantasy sports betting, Nevada has taken a firm stance: Last week the state, one of three which has legalized online gambling, ruled that fantasy sports sites, such as DraftKings and FanDuel, are illegal.
Nevada’s Gaming Control Board issued a notice this past Thursday saying that online fantasy sports sites must stop offering their services to Nevada residents immediately. If they are found to be in violation, operators can face felony fines and up to ten years in prison. On the other hand, the Gaming Control Board invited these sites to apply for online gaming licenses, which can then be approved if they meet all the requirements.
What’s the deal with online fantasy sports?
Online fantasy sports were ruled legal in 2006, at the same time that the Unlawful Internet Gaming Enforcement Act (UIGEA) banned online casino games. Fantasy sports received an exemption in this Act because it was ruled to be a skill-based game, not a game of chance.
Today, lawmakers are re-thining this exception, and saying that there is actually more luck involved in fantasy sports betting than skill, which is why it should be illegal. DraftKings and FanDuel are two of the major daily fantasy sports betting sites that have been taking heat, probably because they are both multi-million dollar operators, but they remain adamant that fantasy sports betting is based on skill, not chance.
Nevada, along with five others states, disagree. The difference between Nevada and the five other states (Arizona, Iowa, Louisiana, Montana, and Washington) is that online fantasy sports can enter the gambling market in Nevada - if they receive licensing. The other states offer no such opportunity.
More Bad News
DraftKings has also been in the news recently due to a scandal in which an employee used insider information to win $350,000 on FanDuel. Not the kind of publicity these companies want.