The State of gambling and home to Las Vegas has closed down daily fantasy sports sites like FanDuel and DraftKings, claiming they cannot operate in the State unless they have gambling licenses.
The Nevada decision comes hot on the heels of recent criticism by lawmakers across the country following media reports of employees often playing on competing sites, raising concerns they are using insider trading information to win.
Experts say the fact that Nevada governs the country’s major gambling hub, could make lawmakers elsewhere in the U.S follow suit in closing down the unregulated sites.
Fantasy sport participants pay an entry fee to compete in games involving college and professional sports. Participants try to assemble teams that earn the most points based on real-life statistics in a given period. DraftKings’ entry fees range from 25 cents to $5,000. Some winning prizes are in excess of $1 million.
The experts say that on first read, Nevada’s decision won’t affect season-long fantasy sports.
FanDuel and DraftKings have been arguing that they are protected by the 2006 Unlawful Internet Gambling Enforcement Act, as it contains a specific exemption allowing fantasy sports, and that they provide games of skill and not chance.
The head of Nevada’s Gaming Control Board, A.G. Burnett, says no daily fantasy sports sites are
licensed in Nevada, but he welcomed DraftKings and other sites to apply for licenses.
“If you’re licensed in Nevada, you’re good to go,” he says.
The sites have to stop offering their contests to Nevada residents as from today. If they do not stop, their operators face fines and 10 years in prison.
There has been no word from Las Vegas or book makers elsewhere on what the odds are that FanDuel and DraftKings will launch a legal appeal against the decision.