[toc]USFantasy Sports has been approved to provide daily fantasy sports contests in Nevada, in what is believed to be the first formal license pertaining to DFS issued in a U.S. jurisdiction.
In a meeting on Thursday, the Nevada Gaming Commission unanimously approved the license for USFantasy.
USFantasy was the first and only company to apply for a license to offer a DFS-style product after the Nevada Gaming Control Board said DFS constituted gambling under state law last year.
How USFantasy works
USFantasy, as offered in Nevada, will not look much like a traditional DFS product, where you pay an entry fee and pick a roster of players, usually under a “salary cap” format.
Instead, USFantasy offers pari-mutuel-style fantasy games. The USFantasy product resembles fantasy sports in that players in real-world games score points based on their performances. From there, the mechanics resemble horse racing.
Here’s how a contest would work in football, for example:
- A contest is based on a single position, quarterback or wide receiver, for example.
- Players can choose from a pool of players at that position, betting on them to “win,” “place” or “show.” (The number of fantasy points the player scores determines their position. Players score five points for a touchdown, for instance.)
- Players can also place bets like they would in horse racing, with exactas (picking the top two players), trifectas (top three players) or daily doubles (picking winners of two contests).
- All wagers are placed in a pari-mutuel pool and distributed after all player performances are complete and tabulated.
- There will also be a $1 million progressive jackpot for NFL, where players can enter all seven available contests in a given week. If a player picks the top fantasy-point producer for all seven contests, he or she would win the jackpot.
- Because the wagering is done on a pari-mutuel basis, wagers on players that are bet on heavily won’t pay as well as ones on wagers with less bettor action.
USFantasy will offer games on the most popular US sports and leagues, including the NFL, Major League Baseball, NBA, NHL, NASCAR and the PGA Tour.
USFantasy also differs from much of the DFS industry as currently situated: USFantasy is a B2B product that is not available directly B2C. (There are several DFS operators that do act as B2B providers, as white-label solutions for offering a DFS platform.)
Where and when will be you able to play USFantasy in Nevada?
That is a question that doesn’t have an answer yet. Because USFantasy was not a formally licensed entity until this week, it could not have serious discussions with other licensed entities about offering its product previously.
USFantasy plans to offer the product to the 79 casino members of the Nevada Pari-Mutuel Association.
According to a USFantasy press release on its Nevada license, “casinos will subscribe to the USFantasy platform through a licensed disseminator, which will distribute the contests to race and sports books within Nevada casinos.”
“It’s a no-lose proposition for the books,” said Tom Willer, marketing director for USFantasy, in an interview with Legal Sports Report. “It’s like we’re offering a new track. Think of it as ‘Fantasy Downs.’ The casinos will receive a percentage of all wagers that are gambled.”
Willer also said that with license in hand, USFantasy hopes to move to the deal-making process in the coming weeks and months.
The first state for DFS licensure?
Several states have enacted laws overseeing operators of DFS contests this year — Colorado, Missouri, Indiana, Virginia, Tennessee and Mississippi . (A bill in New York still needs to be signed by Gov. Andrew Cuomo).
Several sites have registered to operate in Mississippi and are now accepting customers there, although the law there falls short of what could be considered “licensing” DFS operators.
Will USFantasy be in other states, eventually? That’s also an open question. How new DFS laws intersect with the USFantasy product and pari-mutuel wagering — available in 43 states — is a variable.
“We are actively working with the legislative and regulatory bodies of several states to propose the adoption of the USFantasy platform as a turn-key way to regulate, provide tax revenue, and offer a fair platform for fantasy sports through casinos, racetracks, and lotteries where legal,” USFantasy president Vic Salerno said in a press release after the license was approved.
Before that happens, the lights at USFantasy need to be turned on Nevada, something we should see this summer.