Nevada Predictably Declares Daily Fantasy To Be Gambling

from the oh-craps dept

Even if you’re not the world’s biggest sports fan, you’ve probably heard about this whole “daily fantasy sports” thing that’s sweeping the nation. That’s because two of the biggest outfits for daily fantasy, Draft Kings and FanDuel, have apparently conspired to buy up every bit of advertising space they can possibly find. The national ads for all this have become so blanketing that the coverage of the ads themselves has sparked its own backlash. In addition to that, the recent trends have caught the eye of the feds, with the DOJ and FBI now actively investigating whether or not daily fantasy leagues are a form of gambling, or if they should be treated as their parent-concept, the traditional fantasy sports league, as a game of skill rather than chance. I happen to think that’s a simple question with an easy answer of “yes, it’s gambling”, but how the government decides on the matter will have understandably enormous ramifications for the daily fantasy industry as a whole. Gambling faces all kinds of legal questions and regulatory restrictions, after all, which means the government’s involvement will likely mirror that of traditional sports betting, which means every state and industry will act in the most blatantly self-serving manner.

One state has actually decided not to wait around for the federal government to answer this question. In what I think is ultimately an unhelpful and undeniably self-serving decision, the Nevada Gaming Control Board has ruled that daily fantasy games are pure gambling and will be regulated as such in its state.

The Gaming Control Board wrote that because daily fantasy sports involves “wagering on the collective performance of individuals participating in sporting events,” daily fantasy sites must obtain licensing from the Nevada Gaming Commission to continue operating. This presents a problem for DraftKings, FanDuel, and other daily fantasy operators. If they wanted to keep their games open to Nevada’s nearly three million residents, they could surely jump through the necessary hoops to secure regulatory approval. But doing so would admit that daily fantasy is gambling, a distinction daily fantasy operators are desperate to avoid.

I’ll note here that Nevada is far from the first state to decide this way on daily fantasy sports. In fact, 11 other states have already done so. The difference, of course, is that Nevada is doing this without even really bothering to conceal its true motive: its own gambling revenue interests. In what might be a nod to daily fantasy being gambling, Las Vegas is keenly interested in this ruling, seeing these fantasy leagues as competition for its own sportsbooks.

The result of the ruling has been quick, with several of these daily fantasy sites no longer serving citizens in Nevada, including FanDuel. Of course, good luck to the state in actually trying to keep a motivated gambler from circumventing the rules and playing anyway, which is why this whole question is probably ultimately a silly one for any government entity to be asking. All the hand-wringing here is due to this form of gambling being available over the internet. In the same way you have terrestrial casinos lobbying against online poker, so too will they lobby against daily fantasy. Not on any kind of moral grounds, mind you. This is pure business. Gambling is fine. Internet gambling? The devil, obviously.

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Companies: draft kings, fanduel

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Comments on “Nevada Predictably Declares Daily Fantasy To Be Gambling”

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Kal Zekdor (profile) says:

Re: Even if it is Gambling, so what?

You’re undoubtedly correct, but there are a bunch of laws on the books prohibiting Internet Gambling. Mainly due to interstate concerns, as each state has decided for themselves whether or not gambling is ok, and allowing Internet Gambling would enable citizens in those states who don’t like gambling to still do so with out of state partners. Overruling state’s rights is never a popular decision, especially in a Republican controlled congress.

So, Internet Gambling (at least interstate internet gambling, anyway), is expressly forbidden by law.

You might ask, then, how are these Fantasy Sports gambling sites getting away with this?

There is a specific exemption in the statute for Fantasy Sports, 31 U.S. Code §5362(1)(E)(ix):

participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization (as those terms are defined in section 3701 of title 28) and that meets the following conditions

FanDuel and DraftKings were specifically designed to abuse that loophole. I assume that exemption is only there because some senator absolutely refused to give up his Fantasy Sports addiction.

Anonymous Coward says:

Re: Even if it is Gambling, so what?

You’re goddamn right.

Although, the people offering 65% interest schemes for large sums of money to people who gambled too much and are into trouble (those kind of people going after exist a lot here in Qc where gambling is completely legalized and government controlled. Casinos in Montreal, casinos in small 10k people towns in kind of upscale ski resorts who just happen to also have casinos…there’s these network of people getting to know the clients, gambling themselves but they watch for the people getting in trouble and go “hey I can help you out”, very white organized crime. I think there’s too much government power in making gambling where they don’t get a cut illegal, but there should still be security looking for these kind of people. Especially in the giant Montreal Casino.

Mason Wheeler (profile) says:

Re: Re:

I haven’t heard of Beezid either, but if it’s what it sounds like from the context, it’s nothing like eBay. There are sites out there that run scams that make them look like an auction, while in truth they’re running something that just sucks money out of all the the participants’ pockets. (In a real auction, the only one who pays is the person who makes the winning bid. In these sites… not so much.)

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