Nevada Regulators Order Shut Down Of Daily Fantasy Sports Sites

As Boston Globe columnist Kevin Cullen opined on Tuesday, “If you’re taking in a lot of money on wagers and paying out a lot less, you’re in the gambling business, not the skill business”.

Now, in a process known as en banc, at least 12 of the 23 judges in the 3rd U.S. Circuit Court of Appeals in Philadelphia will rehear oral arguments and review supplemental briefs. But these companies have basically co-opted what was once an entertaining hobby to participate in with family and friends, and have turned it into a cut-throat, stunningly legal, way to gamble on sports. Don’t be fooled by the colloquial nature of fantasy sports.

“Today’s daily fantasy sports weren’t envisioned when it got the carve-out in [UIGEA] in 2006”, said Schneider in an interview with Chalk. Similarly, in Kansas, a state website formerly included language that called into doubt the legality of fantasy sports.

Despite big-name hires and the backing of influential investors, DraftKings and FanDuel likely face too much pressure from too many angles to avoid a few degree of damage, said Daniel Wallach, a gambling and sports law attorney at Becker & Poliakoff in Fort Lauderdale, Fla.

Nevada, it seems, is having none of it. Nelson Rose, aleading expert on gambling law.

14 that the Federal Bureau of Investigation is “investigating [the] daily fantasy sports business model” to see if it violates federal law. However, the industry has evolved since that time. Theres now movement to consider new legislation in a handful of others.

DraftKings and FanDuel – sites that have insisted they aren’t gambling and have promised to make millionaires out of sports fans – both pulled out of Nevada by Thursday evening. They have reputational issues right now. The board said it worked with the state attorney general’s office for several months to look into the sites’ legality.

Websites can resume operations in the state only if Nevada law is changed or the owners request licenses, according to the notice.

Before the Haskell event, employees of the DFS major websites were barred from participating on their own websites, but they were able to play on competing websites. In fact, Nevada’s cease and desist order comes just a day a story broke claiming that the Federal Bureau of Investigation had begun a probe into the practices of daily fantasy sports sites.

The conversation we ought to have is whether government could accomplish these goals in light of the potential pitfalls of rushing to regulate. So as US regulators shut down sites domestically, internationally ones crop up to cater to their wants. For example, a DraftKings pool for this past National Football League weekend featured an entry fee of $20 for each lineup, with a top prize of $2 million.

Of course, new rules could also have a big upside for established industry players. “I wouldn’t expect them to stay in and fight”, Krejcik said. I then went on to press him if he believes the DFS industry needs tighter regulation.

DraftPot, founded in a dorm room at Columbia University earlier this year, is one of the little guys that might suffer. And last week FanDuel spent almost $27 million. Young stated the checks confirmed it, however “it doesn’t suggest we will disrespect state legal guidelines”.

Attempts to reach officials at both companies by email were unsuccessful Friday.

Daily fantasy companies point toward UIGEA’s second section in support of their position about DFS’s legality. New York, home to FanDuel, has not yet introduced legislation. Newcomer Yahoo is routinely failing to fill its contests, while numerous small operators appear to be losing money at unsustainable rates. “Federal law and 45 of the 50 USA states allow skill-based gaming”. “We explained the difference between the daily fantasy games and the fantasy offerings from the league”.

The implications of the various probes go beyond individual fantasy operators.