Nevada orders Daily Fantasy Sites to obtain Licenses or quit operating

Daily fantasy sports (DFS) sites like DraftKings and FanDuel continue operating in all but five U.S. states. But they will soon have to stop serving a sixth state, because Nevada has declared that they will treat DFS like any other form of online gaming.

David Gzesh, a Nevada lawyer who deals with gambling and sports law, said that the decision comes from the Nevada Gaming Commission.

“The Nevada Gaming Commission concluded that daily fantasy is gambling and needs to be licensed here,” said Gzesh. “It should give other states pause because if it’s perceived as sports gambling here, no other state can offer it when it violates federal law.”

As the New York Times reports, a big reason why Nevada has become the latest state to denounce unregulated DFS sites is because they have a lot to lose. Currently, their online poker operation has only managed to link up with Delaware (pop. 936k), meaning they haven’t quite cashed in on iGaming. Furthermore, their land-based casinos and sportsbooks are failing to connect with younger generations. Meanwhile, DFS has had no trouble attracting Millennials, who seek out profits from the hottest-trending form of gambling.

“It’s self-serving, but that is what the agency is designed to do — ensure an environment where the state’s licensed operators have the best chance of success, and part of that mission is to address forms of alternative gambling that fall outside the umbrella of regulation,” said Chris Grove, a writer at Legal Sports Report.

The state has given Nevada sportsbooks approval to operate their own DFS operations if they choose to. However, the Nevada Gaming Commission warns that sportsbooks should refrain from participating with unlicensed DFS companies.

As for DraftKings and FanDuel, they are decidedly unhappy with Nevada’s decision. Below you can see their statements on the matter:

FanDuel – “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. In the interim, because we are committed to ensuring we are compliant in all jurisdictions, regrettably, we are forced to cease operations in Nevada.”

DraftKings – “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.”