Another year of NFL with no FanDuel, DraftKings in Nevada

It started with a loophole.

Attempting to curtail offshore gaming, Congress passed legislation in 2006 preventing gambling businesses from accepting payments related to illegal online bets or wagers.

Exempted from the bill, however, were fantasy sports competitions.

“At that time, fantasy sports was this season-long contest among families and friends,” said Maureen Weston, a law professor at Pepperdine University focusing on sports.

Founded in the following years, now-giants of the industry FanDuel and DraftKings took advantage of the exemption, bringing in billions in revenue in 2023.

The game has users draft players and, based on their real-life performance, compete against other entrants to earn cash prizes.

With the kickoff of the NFL season Thursday, fans can again play daily fantasy sports through February — just not in Nevada and a handful of other states. Daily fantasy competitions are a condensed version of the season-long competitions.

The Nevada Gaming Control Board effectively killed daily fantasy sports in the Silver State in 2015, ruling it was a form of gambling. FanDuel and DraftKings have vehemently opposed that position, arguing that it’s a game of skill, not chance.

Ian Ritchie is the founder of FullTime Fantasy Sports, which operates the Fantasy Football World Championship. Since Ritchie’s competition lasts throughout the season, FullTime is able to pay its overall champion $150,000. He agreed with the control board, saying “unequivocally” that daily fantasy is a form of gambling.

Weston, who published a paper on American daily fantasy sports law in 2021, has a different opinion.

“It’s not just random. It’s not just like buying a lottery ticket,” she said. “It is more a game of skill, I’d say, because it’s not just completely random.”

Regardless, FanDuel and DraftKings could apply for a gaming license to operate in Nevada but neither company has taken action.

Brett Abarbanel, executive director of the UNLV International Gaming Institute, said the application process for a gaming license was in-depth, burdensome and costly.

“It’s a very, very extensive process to get a license. … You don’t get to just pay a little bit extra and have that,” Abarbanel said. “It also sets precedent for other states that you consider this activity to be gambling, and therefore it might need to be gambling within their state as well.”

FanDuel declined to answer why daily fantasy hasn’t made its way to Nevada, and a DraftKings spokesperson said the company “wouldn’t be able to accommodate” a request for comment.

The Nevada Gaming Commission did grant a gaming license for daily fantasy sports in 2015 to USFantasy, a now-defunct provider run by industry veteran Vic Salerno.

“Nevada’s powers that be are having trouble realizing that Nevada really could be the home of fantasy for the U.S.,” Salerno told the UNLV Gaming Law Journal in 2017.

Since the Nevada Gaming Control Board’s decision to classify daily fantasy sports as gambling, the industry went through another transformation when the U.S. Supreme Court struck down a 1992 law blocking states from legalizing sports betting.

A total of 38 states have legalized sports betting since the court’s 2018 decision.

In 2021, the NFL announced its first sportsbook partnerships with Las Vegas-based Caesars Entertainment, FanDuel and DraftKings, which also has a corporate office in Las Vegas. In 2020, the Las Vegas Raiders announced a partnership with BetMGM.

The American Gaming Association expects that, throughout this year’s NFL season, Americans will wager a record $35 billion.

Daily fantasy sports have also kept up with the times, introducing new games outside of what Abarbanel considers “traditional” daily fantasy sports.

Underdog Fantasy, founded in 2020, runs “Pick’em” games where users predict whether a player will surpass or fall short of a certain statistic in an upcoming game.

For now, the space will continue to evolve outside of Nevada unless another company applies for a gaming license or the Gaming Control Board changes its classification of daily fantasy sports.

So, will daily fantasy sports ever make its way back to Nevada?

“That’s a question for the regulators,” Ritchie said.

[email protected] / 702-990-8923 / @Kyle_Chouinard