Trouble For DFS In Nevada? Regulators Start ‘Legal Analysis’ Of Daily Fantasy Sports

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Twisting road in Nevada

The Nevada Gaming Control Board is going to start examining the legality of daily fantasy sports in the state.

What Nevada is going to do

ESPN’s David Purdum broke the news via Twitter:

Legal Sports Report spoke further about Nevada’s intentions with Burnett.

“We may also reach out to other states with gaming regulatory systems in place to obtain their thoughts,” Burnett told LSR.

Earlier this month, Burnett had said that the NGCB might look into the legality of DFS under state law, and now that possibility has become reality.

What the NGCB action means

Nevada, obviously regulates gambling closely, as the state with the most liberal gaming laws in the country. Determining whether any of the DFS sites that operate in Nevada should fall under those regulations or run afoul of state law appears to be the mission of the NGCB.

Casino operators have increasingly painted DFS as a form of gambling, although that does not really mean much, from a legal standpoint, other than they are calling attention to the industry’s legal status. Daily fantasy sports — particularly the salary-cap version offered by sites like DraftKings and FanDuel — is generally considered legal in most states by DFS operators. 

DraftKings and FanDuel, for instance, operate in 45 states, although the legality of their contests, or any other DFS offering, has never been challenged under a state law, either. DFS sites sometimes vary in which states they operate in, depending on their reading of state law. DFS generally relies on the idea that it is a “skill game” for its legal status in many jurisdictions.

It’s possible Nevada may attempt to parse out different types of DFS, a concept that covers a wide swath of offerings. Some DFS offerings are more akin to proposition bets than fantasy sports, and it’s at least feasible Nevada will examine different types of contests vis a vis the law.

Regardless, the conclusions that Nevada comes to could have wide-ranging impacts on the industry, especially if other states follow its lead.