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DraftKings and FanDuel forced to stop operations following Fantasy Sport Nevada ban

October 16, 2015

DraftKings and FanDuel forced to stop operations following Daily Fantasy Sport (DFS) Nevada ban

The Nevada Gaming Control Board has ordered DraftKings and FanDuel to cease operations after ruling that daily fantasy sports (DFS) companies cannot offer services in the US state without a valid gambling license.

In a statement confirming the decision, A.G. Burnett, chairman of the Nevada regulator, said DFS meets the definition of a game or gambling game pursuant to Chapter 463 of the Nevada Revised Statutes. “Over the last several months, the Nevada Gaming Control Board staff has analyzed the legality of pay-to-play daily fantasy sports (DFS) pursuant to the Nevada Gaming Contral Act and the regulations adopted thereunder. I further asked the Gaming Division of the Office of the Nevada Attorney General to perform a legal analysis as to whether DFS activities conflict in any way with Nevada law. Based on these analyses, along with the Board’s staff, we have concluded that DFS constitutes gambling under Nevada law. More specifically, DFS meets the definition of a game or gambling game pursuant to Chapter 463 of the Nevada Revised Statutes, - the statement reads. Moreover, because DFS involved wagering on the collective of individuals participating in sporting events, under current law, regulation an approval, in order to lawfully expose DFS for play within the State of Nevada, a person must possess a license to operate a sports pool issue issued by the Nevada Gaming Commission. Further, a licensed operator who offers DFS must comply with all laws and regulations that apply to licensed sports pools”.

The regulatory body has ordered that unlicensed activities related to DFS in the state must cease from October 15 until such time as either the Nevada Revised Statutes are charged or such entities file for and obtain the requisite licenses to offer DFS services in the state. “Although Nevada gaming licensees who have received approval to operate a sports pool may expose DFS for play themselves in Nevada, such licensees should exercise discretion in participating in business associations with DFS operators that have not obtained Nevada gaming approvals, the statement adds. While the industry Notice is intended to provide clear guidance as to Nevada law, Nevada licensees wishing to conduct business with DFS companies should also conduct thorough and objective reviews of DFS activities under the laws of other states and any applicable federal laws”.


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