After the daily fantasy sports industry came under scrutiny for alleged insider trading, the state of Nevada has now decided to declare the activity as a form of gambling. Operators of daily fantasy sports in the state were asked to cease operations yesterday and to obtain licensing to legally operate in the state. Nevada is now the first state to take such action on the daily fantasy sites such as DraftKings and FanDuel.
The Nevada Gaming Control Board released a notice on the matter, alerting operators that offering such services without licensing would be breaking the law. Any operator who continues to offer daily fantasy sports in Nevada will be subject to felony charges which can include as much as 10 years in prison along with large fines.
Such daily fantasy sports providers as DraftKings and FanDuel have become popular as they resemble sports gambling. Members of such sites will pay an entry fee to have the opportunity to choose a lineup of players who will compete in games that take place on that given day or week. Players can win cash prizes based on the performance of chosen players.
Companies that offer daily fantasy sports services feel they are legal to operate under the 2006 federal law that allows gaming under certain conditions. However, there are states in which players have not been able to participate on FanDuel and DraftKings, including Wisconsin and Louisiana. Over the past few days, the DFS companies have been hit with lawsuits by customers as well as regulation under debate in individual states in the US. Even the FBI has begun to investigate the industry, though no information has been released as to what aspect is under investigation.
Both DraftKings and FanDuel released a statement after the Nevada Gaming Control Board announced their decision. Both companies are disappointed in the decision and plan on working to provide gaming options to individuals in Nevada once again, in the future. Each company plans on abiding by the rules and regulations set forth by the board and are committed to being compliant by ceasing operations in Nevada.
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