The Nevada Gaming Control Board has ordered DraftKings and FanDuel to cease operations after ruling that daily fantasy sports (DFS) companies cannot offer services in the US state without a valid gambling licence.
In a statement confirming the decision, A.G. Burnett, chairman of the Nevada regulator, said DFS meets the definition of a game or gambling game pursuant to Chapter 463 of the Nevada Revised Statutes.
Burnett said as DFS involves wagering on the collective performance of individuals taking part in sports events, operators offering such services must, under current state law, acquire a licence to operate a sports pool from the Nevada Gaming Commission.
Burnett also noted that a licensed operator that offers DFS must comply with all laws and regulations that apply to licensed sports pools in the state.
As a result, Burnett and the regulatory body have ordered that unlicensed activities related to DFS in the state must cease from October 15 until such time as either the Nevada Revised Statutes are charged or such entities acquire the necessary licences to offer DFS services in the state.
Burnett also noted that although operators that have received approval to operate a sports pool in the state may expose DFS for play themselves, he warned that such licensees should exercise discretion in participating in businesses associations with DFS operators that have not obtained approval from the state.
“While this industry notice is intended to provide clear guidance as to Nevada law, Nevada licensees wishing to conduct business with DFS companies should also conduct thorough and objective reviews of DFS activities under the laws of other states and any applicable federal laws,” Burnett added in the statement.
A number of other DFS operators have also confirmed that they will comply with requests from the regulator and cease operations in the state.
The ban will come as a further blow to DraftKings and FanDuel, which have both attracted criticism in recent weeks after it as revealed that a DraftKings manager inadvertently released data on fantasy teams for the NFL American football league and won a cash prize through FanDuel.
Both operators face a class action lawsuit in the US while New York Attorney General Eric Schneiderman has also launched an inquiry into both operators to establish the advantages DFS staff may have gained using data to win prizes on competing operators.
In addition, the Wall Street Journal newspaper has also reported that the US Department of Justice and the FBI are in the early stages of investigating daily fantasy sports operators.
In response to the ban, DraftKings said in a statement: “We understand that the gaming industry is important to Nevada and, for that reason, they are taking this exclusionary approach against the increasingly popular fantasy sports industry.
“We strongly disagree with this decision and will work diligently to ensure Nevadans have the right to participate in what we strongly believe is legal entertainment that millions of Americans enjoy.
“Unfortunately, we now have to temporarily disable our product for our thousands of customers in Nevada in order to be compliant in all jurisdictions.”
FanDuel also responded with a statement of its own: “On behalf of our users in Nevada, FanDuel is terribly disappointed that the Nevada Gaming Control Board has decided that only incumbent Nevada casinos may offer fantasy sports.
“This decision stymies innovation and ignores the fact that fantasy sports is a skill-based entertainment product loved and played by millions of sports fans.
“This decision deprives these fans of a product that has been embraced broadly by the sports community including professional sports teams, leagues and media partners.
“We are examining all options and will exhaust all efforts to bring the fun, challenge and excitement of fantasy sports back to our Nevada fans.
“In the interim, because we are committed to ensuring we are compliant in all jurisdictions, regrettably, we are forced to cease operations in Nevada.”
Also responding to the news was Joe Asher, chief executive of William Hill US, who said: “I think the Gaming Control Board’s notice speaks for itself. It shouldn’t come as a surprise.”
source : www.igamingbusiness.com
