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FanDuel & DraftKings Miss the Jackpot in Nevada

Nevada daily fantasy sports has suffered a real blow after a State committee rejected a DraftKings/FanDuel legal petition.

Lobbyists for the two companies put forward a ‘fantasy sports license’ petition last week. This license would be new for the State, which already has comprehensive sports gambling licensing in place.

The Nevada Gaming Policy Committee rejected the proposed legislation because it was deemed not up to State standards. The committee was made up of state regulators, government officials, and casino lobbyists.

Regulators slammed the petition as having merely token rules, fees and taxes. The proposed legislation would give the State little regulatory power over DFS companies and the software they use. Furthermore, people involved with sports betting have much more protection in the current law. In this respect, the proposed license was deemed not up to scratch.

As one regulator commented:

“The fees generated by the proposed language would not even cover the cost of regulatory oversight for fantasy sports.”

What’s the big deal?

You may be wondering why DraftKings and FanDuel want to create a new license for their games in Nevada, when there’s one they can already use. This is especially true for players like us in the UK, where online gambling is legal.

Daily fantasy sports operators don’t want to use Nevada’s current sports gambling license. This is because it would associate DFS with games of chance. Online gambling is illegal in other U.S. states; operators don’t want to be tarred with the same brush throughout the country.

Daily fantasy sports operators have fought hard to be recognised as legitimate skill games in states like New York and Virginia. They wouldn’t want to put their chances of legalisation in more states in jeopardy by having Nevada gambling licenses.

Further to this, if they applied for a Nevada sports gambling license the operators would have to pay a huge Federal tax. This tax applies to all money wagered in a sports pool, and could be an overwhelming expense for operators.

Can Nevada daily fantasy sports make a comeback?

Provisionally, yes. The Nevada Gaming Policy Committee do want DFS operators back in the State. However, Nevada has comprehensive gambling legislation, and the proposed license just wasn’t on the same level.

It looks like DraftKings and FanDuel are going to have to meet Nevada halfway on this one, in order to get Nevada daily fantasy sports back on track – assuming they still want to at this point.

When DraftKings and FanDuel put their petition to the committee, their lobbyist Scott Ward said:

“Because of the way that Nevada has decided that we should apply for a gaming license as a sports pool or bookmaker, we are unable to offer our service here […] so we had a choice. Operate in Nevada or operate in every other state. And honestly, that is not a very hard decision to make.”

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