Nevada, the world’s most famous gambling hub, on Thursday declared that Fantasy Sports is a form of gambling and will, going forward, require a license to operate in the state.
The new ruling means popular Fantasy Sports games such as FanDuel and DraftKings will be required to have a license to function out of Nevada. Ever since their inception, Fantasy Sports games have risen in popularity with a business model that some feel resembles gambling.
How exactly do Fantasy Sports games work? A participant is required to pay an entry fee to select a desired lineup of players competing in games (NFL, NBA, MLB, etc.) within that day or week. Based on the performance of their chosen players, a participant is entitled to cash prizes up to $1 million.
A.G. Burnett, chairman of the Nevada Gaming Control Board, said Thursday that illegal operators could face felony fines and up to 10 years in prison. “A lot of people have the idea that all of gambling is determined by skill versus chance,” Burnett told ESPN. “That’s just not the case, because in a state like Nevada, our statutes and definitions override that.”
Burnett continued, “We’re also saying that these are sports pools, which is when someone is in the business of accepting wagers on sporting events through any system or method of wagering. We have found that it is a wager, and obviously, it’s on a sporting event, and DFS companies are in the business of accepting those wagers.”
Arizona, Iowa, Louisiana, Montana and Washington are other states that currently prohibit Fantasy Sports. According to USA Today, the FBI has opened a preliminary inquiry into the burgeoning Fantasy Sports industry.