Nevada questions season-long fantasy sports
LAS VEGAS (AP) — Nevada has already decided daily fantasy sports are gambling and that people can’t put their dollars down on DraftKings and FanDuel until those sites obtain a license in the state.
State gambling regulators haven’t been as clear about paid season-long fantasy games offered by such longtime operators as CBS Sports and Yahoo Sports, which make a profit and pay cash prizes.
Yahoo has pulled out of Nevada out of caution that their paid season-long games might run afoul of state opinion. Still others continue to offer a chance for players to win. They games are played by putting together a lineup of players and charting their results, much like the daily game, but for the season and with the opportunity to swap athletes because of injury or bad play.
Nevada concluded on Oct. 15 that daily fantasy sites are akin to sports pools, broadly defined as accepting wagers on sporting events.
The conclusion doesn’t weigh in on the legality of season-long leagues, except to describe the types of fantasy sports. But the money leagues accept a fee to enter, keep a portion of what’s paid and award cash prizes.
“The focus of the analysis was daily fantasy and we will look at season-long offerings under the same microscope,” said Nevada Gaming Control Board chairman A.G. Burnett, shortly after the opinion was first issued. Board member Terry Johnson said regardless of the time period, daily versus season-long, “it would still come down to if it constitutes sports wagering.”
Fantasy sports sites, both daily and season-long, have argued they aren’t gambling. They point to a 2006 federal law that exempted the contests in banning Internet gambling and say there’s more skill than chance to playing.
Nevada shot down both arguments, saying federal law didn’t overrule state law and that Nevada’s new statute allowing for “skill-based” games would still put the sites under its gambling umbrella.
“It’s a murky area,” said Tom Kessenich (Keh-sen-ick), manager of the high-stakes fantasy games for STATS LLC. He stands by the federal Unlawful Internet Gambling Enforcement Act that says fantasy sports aren’t gambling.
STATS runs the National Fantasy Baseball Championship and other season-long sports contests and in some cases offers a $20,000 first-place prize.
The company has tried to get clarity from Nevada’s attorney general’s office as well as managers at the Bellagio where the championship hosts its annual draft event on whether it falls into the same definition that ensnared daily fantasy, Kessenich said.
While the legal opinion was focused on daily fantasy sports, “that language covers everything in fantasy,” namely that the site’s customers are playing games for cash prizes, he said.
He said the company keeps less than 20 percent of the entry fees, on average, from all of their contests.
The president of the Fantasy Sports Trade Association emailed its 300 or so fantasy sports members, aiming to clarify Nevada’s decision for season-long sites during “this turbulent time.”
Paul Charchian wrote that he had spoken with Nevada’s chief gambling regulator, A.G. Burnett, and was told the scope of the Oct. 15 decision was limited to daily fantasy sports.
“That said, Burnett recognizes that season-long paid contests have similar traits to daily fantasy sports, and could become subject to a similar ruling at some point in the future,” Charchian wrote. He added that paid season-long fantasy sports businesses shouldn’t feel compelled to stop their contests mid-season for Nevada customers.
Yahoo Sports didn’t stop the season midway for its Nevada players still vying for cash prizes.
But while they can keep playing, the popular fantasy sports site is no longer offering to Nevada residents new entries to its “pro leagues” that promise modest prizes for entries of $20 to $250.
The fine print for the site’s contests now say players can’t be residents of Arizona, Florida, Iowa, Louisiana, Montana, Nevada and Washington, lumping Nevada in with other states that have previously barred paid fantasy sports. Yahoo earns 10 percent of the entry fees for managing the leagues.
CBS Sports hasn’t added any such language and is still operating in Nevada. The Florida-based company bars individuals from Arizona, Iowa, Louisiana, Montana and Washington from playing.
In its contests, entry fees range from $39.99 to $999.99 with prizes worth up to $7,000. The company appears to earn 42 percent to 58 percent of what players pay to play, based on the league they’re in.
CBS Sports declined to comment about how much they earn from paid season-long fantasy sports.
This story has been corrected to show that CBS Sports declined to comment about how much they earn from paid season-long fantasy sports, not daily fantasy sports.