DFS isn’t illegal in Nevada, but Nevadans still have no way to play… or do we?
Written By Dominic Schatzan
On October 15, 2015, the Nevada Gaming Control Board announced that all Daily Fantasy Sports were operating illegally in Nevada because they were not licensed to do so. Thousands of Nevadans were suddenly unable to participate in DraftKings and FanDuel contests.
Five years later, and Nevadans are still waiting for the promised return of DFS. DraftKings and FanDuel have repeatedly expressed their desire to operate in Nevada, but their path to legal operation has been made complex by the archaic nature of the Nevada gambling industry. What is holding up the legal process in 2020?
That question isn’t rhetorical; details are scarce on where DraftKings and FanDuel are in their paths to licensure and the Nevada Gaming Control Board (NGCB) is equally quiet about the process. The NGCB publicly tout that they’re open to bringing Daily Fantasy Sports (DFS) into Nevada, but that DFS companies, like DraftKings and FanDuel, must first become legally licensed to operate in Nevada.
So DFS companies just need to get their paperwork submitted to operate in Nevada; seems simple enough, right? Wrong.
Not only is the process proving to be lengthy, DFS companies have run into physical barriers: Due to an old and outdated law that requires bettors to go in person to start an online sports betting account with the sportsbook of their choice, DraftKings and FanDuel must have physical locations in order to start operating in Nevada.
This physical requirement has not been implemented in any other state that has legalized sports gambling. Without this rule, it’s possible that DFS would have returned to Nevada by now, but other problems persist.
Misconceptions and Refusals to Comment
A couple of misconceptions about why DFS hasn’t returned to Nevada has kept the conversation directed the wrong way. You may have heard that DFS is “illegal” in Nevada or was “outlawed”, but that is simply not true.
According to the NGCB, Daily Fantasy Sports are perfectly legal in Nevada, so long as the companies running DFS contests are properly licensed by the NGCB. You also may believe that the NGCB is wrong and that DFS should be legal in Nevada because it is a game of skill; you’d be wrong.
While DFS could be considered a game of skill, Nevada laws do not distinguish a difference between playing blackjack, roulette, craps, or Daily Fantasy Sports. They all fall under an umbrella title of “gambling games” under Nevada law. If the prize for winning is money, it’s a gambling game.
Due to these misconceptions, many Nevadans fail to realize that the only thing holding up the return of DFS to our state is licensing. We don’t know exactly what that holdup is or who is responsible, leaving the rest of us outside the DFS companies and government bodies to speculate about who is at fault.
When asked about where companies like DraftKings and FanDuel are in the process of becoming licensed to operate in Nevada, the NGCB declined to comment, instead directing this writer to a 2015 memorandum from the office of the Nevada Attorney General that determined the legality of DFS.
With no information acquired from the NGCB aside from a 5-year-old memo, the next step was to ask DraftKings and FanDuel themselves about what the holdup with licensure is. FanDuel declined to comment on the matter, while DraftKings sent over a short statement to The Rebel Feed:
“DraftKings has years of experience developing strong relationships with elected officials and regulators in numerous jurisdictions, including Nevada. Our company works tirelessly to enter new markets at the earliest opportunity and, in coordination with local officials, our goal is to get our top-rated product offering in the hands of customers in every regulated state possible.”
– DraftKings Spokesperson (their attribution, not mine).
Nevadans continue to be left in the dark about the return of DFS to our state. Will it ever return? DraftKings has put down some roots in Nevada: an office in Las Vegas and the sponsorship of UNLV’s Gaming Innovation Studio. At least one company seems determined to end the hiatus of DFS in Nevada, but we still don’t know when that end is coming.
So Where Do We Go From Here? How Much Does Licensure Really Matter?
Without any companies operating a DFS platform in Nevada at the moment, Nevadans’ only option to play DFS is by going through an out-of-state acquaintance or using Virtual Private Networks (VPN) to disguise their location as one where playing DFS is legal; when DraftKings and FanDuel identify a user’s location through the internet, they block potential users whose locations appear in states where DFS is regulated.
The problem with these methods is that if you ever win a significant amount of money, you will be asked for tax information in order to receive your winnings; carrying forward would put users gaming the system in a legal bind. This essentially limits users to playing DFS for small winnings, but for others who derive fun from the opportunity to win big, these methods won’t suffice.
Daily Fantasy Sports is a huge industry that is making billions of dollars and is growing year over year. This year has been one of the biggest years of growth for DFS and its eventual return to Nevada would bring a huge boon to DFS companies and Nevada alike.
Licensure of DraftKings, FanDuel, and other DFS companies is the only true way forward for Nevada. To date, only one company has been approved for a license to run DFS in Nevada, USBookmaking.com in 2018, but they have yet to offer any form of DFS competition and they have not offered a timetable to even do so.
While Nevada casinos may fear that DFS could cut into their sportsbook’s profits, DFS is simply wading into a vast sea of sports gambling and it should only increase the overall sports gambling profile Nevada can offer. It is well past the time for Nevada and Daily Fantasy Sports to reunite.