Nevada’s financial motivation for this ruling are immediately recognizable: (1) the UIGEA prevents Nevada gambling corporations (casinos, notably) from expanding across multiple states, so the DFS industry has the advantage of interstate gaming between players from multiple states (2) by forcing the DFS sites to obtain licenses to operate in Nevada, the state not only receives license fees, but also a portion of each sites revenue (which is incredibly lucrative given DFS has become a multi-billion dollar industry over the past few years). In accordance with the Unlawful Internet Gambling Enforcement Act of 2006 (“UIGEA”), if DFS is ruled to be a game of skill, it is exempt from the prohibitions of the statute however, if states decide that it is predominantly a game “subject to chance, upon an agreement or understanding that person or another person will receive something of value in the event of a certain outcome,” then it is subject to the UIGEA and state regulations. As such, the Nevada Gaming Control Board has mandated that DFS sites obtain gambling licenses in order to operate in Nevada. On Thursday, October 15, Nevada regulators took the plunge to combat Daily Fantasy Sports (“DFS”) sites like DraftKings and FanDuel and ruled that DFS gaming is a game of chance rather than a game of skill.
