Nevada gaming officials block fantasy sports sites

Nevada regulators are ordering fantasy sports websites in their state to stop operations until they obtain gaming licenses.

The Nevada Gaming Control Board said the websites, including companies DraftKings and FanDuel, should be treated as gambling operations.

“I, along with Board staff, have concluded that [daily fantasy sports] constitutes gambling under Nevada law,” said A.G. Burnett, the board’s chairman, in a letter posted on the agency’s website. 

{mosads}Nevada is home to many legal gambling operations, and its treatment of fantasy sports websites would set an influential precedent across the nation. The news was first reported by The New York Times.

The move comes just one day after reports that the FBI and Justice Department are investigating daily fantasy sports sites to see if they violate any federal laws.

The fantasy sites have been under intense scrutiny after it was revealed that an employee of DraftKings made $350,000 on a rival site and also disclosed key data on customers’ picks. That led to concerns about insider trading-type behavior, though the companies have denied any wrong doing.

Online fantasy sites have been able to operate because of an exemption from the federal law that bars many forms of online gambling. They are treated as games of skill rather than gambling, but critics have questioned that treatment.

The American Gaming Association said they welcomed the decision in a statement Thursday.

“The casino gaming industry has repeatedly called for greater legal clarity on daily fantasy sports. We appreciate that the Nevada Gaming Control Board has provided that clarity as well as a roadmap for [daily fantasy sports] companies and casinos to provide popular fantasy sports within Nevada borders,” the group said.

“We will continue to seek additional clarity in other jurisdictions, as eliminating ambiguity is in the best interests of all parties, including consumers.”

— This story was updated at 8:21 p.m.