Nevada Cracks Down on Fantasy Sports Sites

by | October 19, 2015 AT 3:30 PM

By Geoffrey C. Arnold

Those popular daily fantasy sites such as FanDuel and Draft Kings have taken plenty of hits during the past months.

The biggest hit so far occurred Thursday, when the state of Nevada ruled that playing daily fantasy sites are a form of gambling and ordered them to shut down within the state.

"The Nevada Gaming Commission concluded that daily fantasy is gambling and needs to be licensed here," David Gzesh, a Nevada lawyer specializing in gambling and sports law, told the New York Times. "It should give other states pause because if it's perceived as sports gambling here, no other state can offer it when it violates federal law."

Nevada's ruling is the latest in a series of negative news regarding daily fantasy sites. The FBI and U.S. Dept. of Justice are investigating the practices of Draft Kings after an employee won $350,000 on FanDuel amid claims of using insider information for an unfair advantage. A class-action lawsuit was filed against FanDuel and Draft Kings last week, claiming the sites "violated fraud, negligence and consumer protection laws" and allowed "employees to access certain information."

Nevada's ruling is a big blow to the multi-billion daily fantasy site industry. The fast-growing industry is largely unregulated and if those sites want to resume operating in Nevada, they would have to obtain a license and essentially admit the sites are for gambling. That's an admission fantasy sites want to avoid at all costs.

(c)2015 The Oregonian