DraftKings and FanDuel will not be allowed to offer sports betting in Nevada anytime soon as both intend to offer sports predictions.
The Nevada Gaming Control Board said it accepted the surrender of Flutter‘s order of registration as well as licenses and approvals, including those for FanDuel. It also granted “administrative approval of requests for withdrawal for all active and pending applications” for both FanDuel and DraftKings.
“It has been made clear to the Board that Flutter Entertainment/FanDuel and DraftKings intend to engage in unlawful activities related to sports event contracts,” Chairman Mike Dreitzer said in Wednesday‘s notice. “This conduct is incompatible with their ability to participate in Nevada’s gaming industry.”
Neither ever offered online sports betting in Nevada and had no near-term intentions of launching. The FanDuel brand was in the market, though, as the sportsbook at Boyd‘s Fremont Casino was branded FanDuel Sportsbook at one point with FanDuel supplying the odds of the Boyd-controlled sportsbook.
FanDuel Predicts coming in December
The NGCB alert was sent just minutes before Flutter announced FanDuel Predicts would go live in December with sports event predictions in states that do not offer online sports betting.
“Subject to appropriate regulatory filings, the app will provide access to sports event contracts across baseball, basketball, football, and hockey,” said the release. “In states where online sports betting is not yet legal, customers who are not on tribal lands will be able to trade event contracts on the outcome of sporting events. As new states legalize online sports betting, FanDuel will cease offering sports event contracts in those states.”
“In addition to sports, event contracts will be offered on benchmarks such as the S&P 500 and Nasdaq-100, prices of oil and gas, gold, cryptocurrencies, and key economic indicators such as GDP and CPI.”
Responsible gambling tools will be available
FanDuel Predict will include FanDuel’s “industry-leading consumer protection program.”
“The platform will empower customers to trade responsibly with tools to help manage exposure, track spending and make informed trading decisions,” said the release. “Within the app, customers will find educational resources to learn about prediction markets and how to buy and sell event contracts. Customers may set deposit limits and deposit alerts that apply to all FanDuel products and may self-exclude, just as they can on all FanDuel products today.”
Standard Know Your Customer information will be required as part of the sign-up process, including Social Security number and valid ID.
FanDuel: ‘difficult decision’ to surrender license
The following is a statement from FanDuel:
“FanDuel has built our business on operating within clear regulatory frameworks and maintaining strong partnerships with state gaming regulators across the 24+ jurisdictions where we hold licenses. We value those relationships and the collaborative approach to state gambling regulation.
“While we are enthusiastic about expanding FanDuel’s presence in Nevada, our views of the current opportunity for prediction markets outside of regulated states are unfortunately in direct opposition to Nevada’s priorities for its licensed operators. As a result, we are making the difficult decision to voluntarily surrender our license. We look forward to resuming our Nevada efforts in the future as circumstances allow.
“Our commitment to operating with integrity and in partnership with state regulators remains unchanged and appreciate the time and attention regulators have dedicated to our situation.”
DraftKings ‘dedicated’ to working with regulators
Withdrawing DraftKings’ inactive application is part of the company’s commitment to regulatory compliance, Chief Compliance Officer Jen Aguiar said:
“DraftKings holds its gaming licenses in the jurisdictions where we operate in the highest regard. As part of our ongoing commitment to regulatory compliance, we have withdrawn our inactive application in Nevada.
“Prediction markets are federally regulated by the Commodity Futures Trading Commission (CFTC), and we remain dedicated to working collaboratively with regulators to uphold the highest standards of integrity in our operations.”
NGCB reiterates predictions position
The NGCB included the same information it sent to licensees back in October in a memo warning operators not to offer sports predictions – not just in Nevada, but anywhere:
“The Board considers offering sports event contracts to constitute wagering activity under NRS 463.0193 and 463.01962. Wagering occurs whether the contract is listed on an exchange regulated by the Commodity Futures Trading Commission (CFTC) or elsewhere.
” … If a Nevada licensee chooses to offer sports event contracts in Nevada or decides to partner with other entities offering sports event contracts in the state, the Board will consider these developments as it evaluates the suitability of the entity to maintain a Nevada gaming license under NRS 463.170. Moreover, even if a licensee does not offer sports event contracts or wagers in Nevada, if the licensee offers sports event contracts in another state without complying with the other state’s restrictions or licensing regime, partners with another entity that offers sports event contracts in another state without complying with the other state’s restrictions or licensing regime, or acts in violation of a compacted tribal right, the licensee may be subject to discipline under the Gaming Control Act.
” … The Board may take administrative action or enforcement action against any licensee that pursues illegal sports betting in this manner. Further, the Board will consider any such conduct when evaluating suitability for new applications filed pursuant to the Gaming Control Act.”
