The Nevada Gaming Control Board ruled Thursday that daily fantasy-sports games constitute gambling under state law, dealing a significant blow to the multi-billion-dollar industry as it comes under increasing scrutiny from state and federal law-enforcement agencies.
Under federal law, daily fantasy-sports sites like FanDuel and DraftKings are considered games of skill. But Nevada defines gambling as “any game played with cards, dice, equipment or any mechanical, electromechanical or electronic device or machine for money, property, checks, credit or any representative of value.” Because daily fantasy sports involves “wagering on the collective performance of individuals participating in sporting events,” the board ruled, it constitutes gambling and must receive a license to operate in the state. Since no such sites currently hold a license, all of them must cease operations in the state immediately.
Although the board’s decision only applies in the Silver State, Nevada’s preeminence in American legal gambling could persuade other jurisdictions to revisit the sites’ legality. An exemption in the Unlawful Internet Gambling Enforcement Act of 2006 allows pay-to-play fantasy sports to operate under federal law, but state regulations can forbid the practice. Arizona, Iowa, Louisiana, Montana, and Washington already prohibit pay-to-play daily fantasy-sports games.