The latest decision of the state of Nevada to rein in the Daily Fantasy Sports (DFS) companies is undoubtedly, a big blow to the activities of these companies. Since Nevada happened to be the sole state in the country where sports books operated, the daily fantasy sports companies were hoping to flourish here based on their contention that their activities involved skill and were not merely chance based. However, such arguments could cut no ice with the authorities in Nevada.

DFS Activities Drawing Ire

The massive growth of the daily fantasy sports and the allegations of insider trading finally made the authorities rule that DFS companies needed to be brought under the long arms of betting rules. The DFS companies led by the market leaders, FanDuel and DraftKing, had all along been escaping the dragnet of online betting laws, conveniently camouflaging as a skill-based activity. Yet their fierce lobbying could not undo the damage done by the widespread charges of blatant insider trading and other exposure on how the DFS could in no way fall under the skill-based category. For now, both the companies have assured to fall in line and abide the ruling of the state.

Nevada’s Ruling

Chairman of Nevada Gaming Control Board, Burnett, by his notice served on 15 October has made it amply clear that all the DFS companies should cease their operations forthwith and could resume their activities only after procuring license under the sports betting laws of the state. This has left all the DFS companies to abruptly shut their operations and issue statements disagreeing with the latest ruling. With the ruling Nevada has now become the sixth state to prohibit the free run of DFS companies.

The Future of DFS

The extraordinary growth of daily fantasy sports made both, the start-up companies and giants in business like Google, Yahoo and Disney to invest in them. The projected growth of the industry over the next five years was something close to 50%. Under such scenario, Nevada’s share of the overall market was likely to be negligible. Yet, the state has now taken a grim view of the DFS activities. People in the know of the system concede that it could be almost next to impossible to secure license for DFS activities under the online betting rules of Nevada.

Massachusetts’ Support

With opinion makers and government taking not so liberal views of the activities of daily fantasy sports companies, the state of Massachusetts has given a ruling to the effect that DFS is not illegal. For companies like DraftKings and FanDuel this comes as a big relief while they wait for the ruling of the reviews on DFS activities by the states of Florida and Michigan. The American Gaming Association has, in fact, called for overall reforms in betting laws to make the laws more relevant to the times. But as of now, undoubtedly, it is a huge setback to the DFS sites that were planning to expand in a big way.

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