Nevada orders daily fantasy sports websites to cease operations

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The Nevada Gaming Control Board has ordered pay-to-play daily fantasy sports operators to cease operations in the state, saying the websites meet the state’s definition of gambling.

A.G. Burnett, the Chairman of the Nevada Gaming Control Board, announced his decision after his office analyzed the legality of daily fantasy sports websites, in which customers pay entry fees to draft virtual sports teams that complete against each other for prize money based on the performance of athletes. The office of Nevada Attorney General Adam Laxalt also participated in the investigation.

“Based on these analyses, I, along with Board staff, have concluded that DFS (daily fantasy sports) meets the definition of a game or gambling game pursuant to Chapter 463 of the Nevada Revised Statutes,” Burnett said in a notice. “Moreover, because DFS involves wagering on the collective performance of individuals participating in sporting events, under current law, regulation and approvals, in order to lawfully expose DFS for play within the State of Nevada, a person must possess a license to operate a sports pool issued by the Nevada Gaming Commission.”

Burnett added: “Therefore, since offering DFS in Nevada is illegal without the appropriate license, all unlicensed activities must cease and desist from the date of this Notice until such time as either the Nevada Revised Statutes are changed or until such entities file for and obtain the requisite licenses to engage in said activity.”

Earlier this week, the Wall Street Journal reported that the U.S. Justice Department and the Federal Bureau of Investigation have opened investigations whether the business model of daily fantasy sports websites violate federal law. The U.S. Congress in 2006 prohibited financial companies from transferring money to online gambling sites, but daily fantasy sports sites operate under exemptions for so-called games of skill, according to the Wall Street Journal.

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