Nevada regulators ordered daily fantasy sports sites like DraftKings and FanDuel to shut down Thursday, saying the hard-to-miss sites that have flooded the marketplace with TV and Internet ads cannot operate in the state without a gambling license. The decision comes amid growing backlash by regulators and investigators, including New York's attorney general, after it was revealed employees often played on competing sites, raising questions about possible insider information being used to win. Nevada regulators govern the country's main gambling hub in Las Vegas, and their actions could hold sway with regulators elsewhere, who currently treat fantasy sports as games of skill, not chance.
A notice issued by the Gaming Control Board says the sites must stop offering their contests to Nevada residents immediately, and until they're granted a license. Operators face felony fines and 10 years in prison for running an illegal gambling site. The board says it worked with the state attorney general's office for several months to look into the sites' legality. A sports law expert from Florida says the board's decision is not going to "cause an extinction of fantasy sports from Nevada, forevermore," but it confirmed what observers familiar with the gambling industry have long contended. "Fantasy is a form of gambling that should be licensed just like sports betting, just like any other form of gambling," he says. (Read more Nevada stories.)