The Nevada Gaming Control Board ruled Thursday that participating in daily fantasy sports leagues is a form of gambling and that all daily fantasy sites without proper regulations must be shut down immediately. Operators who do not comply with the ruling could be fined and face up to 10 years in prison.
“I think the Gaming Control Board has always been a little bit leery of operators coming in here,” sportsline.com analyst and Vegas insider Todd Fuhrman said on CBS Sports Radio’s The DA Show. “We know what the screening process is if you’re going to work in a sports book, if you’re going to work in a casino, if you want to open a casino or do any of those things. So when you have some of these other operators that are trying to carve out their own niche in the space, there’s a little bit of skepticism. And when regulatory issues are always present on the tip of everyone’s tongue here as far as the gaming control board is concerned, they decided to rule pretty quickly. This is a Gaming Control Board that doesn’t usually do things with the speed of light. This happened a lot faster than any of us ever anticipated.”
“I think that they just realized when there’s so many questions out there about an entity – whether you want to call it skill, whether you want to call it gambling – we knew where the Gaming Control Board was going to come down on the issue,” Fuhrman said. “They just felt in the interest of the state and some the residents that it would be better to act swiftly and to try and put a moratorium on this until there can be a little bit more research done and regulation put into place for all these various operators that are controlling a stake in the industry.”
The board’s ruling is effective immediately. The only question now is, will other states follow suit?
“Obviously a much more sensitive issue when you’re talking about gaming in the state of Nevada than elsewhere,” Fuhrman said, “but we could see a domino effect, which probably won’t be the best thing in the world for daily fantasy operators. (This ruling) basically says that we’re not eligible as residents of Nevada to compete in any of the larger prizes that are out there. So when you talk about some the tax regulations and restrictions that are there, there is forfeiture of some of that prize money if it’s deemed that Nevada is your primary resident.
“(The board) moved a lot quicker than any of us anticipated, but I guess the (more than) $80 million in advertising that showed up the opening week of the NFL season really opened eyes,” Fuhrman continued. “When you’re spending that kind of money on advertising, it’s always going to pop the question: What exactly is going on behind the scenes? What’s the cash flow look like? Why are you able to spend these kind of large amounts in this type of situation? Nevada ruling this quickly is a little bit surprising to myself and people a lot closer to the situation knowing that yes we’re a small state with a population barely around 2 million. But knowing how the state feels about gambling and its willingness to embrace it as far as the state economy – tax ramifications and everything else – other states are definitely going to have to take notice.”