DFS Operators Create Legislation Proposal in Nevada

by Jim Hall

Draftkings and FanduelDaily Fantasy Sports companies DraftKings and FanDuel have created a legislation proposal for the state of Nevada in the hopes that DFS will be considered a legal activity.

Across the United States, daily fantasy sports has become a hot topic of debate. Individual states are deciding whether or not the activity is legal or illegal, usually stemming around if the contests require sill or are a game of chance. Several states have named the activity to be illegal and then turn around and create legislation so the contests are regulated for consumer protection. The state of Nevada is one that has ruled the activity an illegal one but has yet to create legislation to regulate the activity.

Operators Create Legislation

Taking matters into their own hands, DraftKings and FanDuel have created legislation that proposes the legalization of daily fantasy sports in the state of Nevada. The two daily fantasy sports operators want to be able to offer services once again in the state. The proposal would create a fantasy gaming license with a system in place to see operators having the ability to offer daily fantasy sports contests once again. A licensing fee is included in the proposal which would have to be paid in order for operators to offer services.

The Associated Press is reporting that the proposal, which is five pages long, is suggesting that operators pay a fee of $10,000 for annual licensing. Owners would have to have at least a 15% stake in a company to identify themselves within the state, basically working with gaming owners to offer services. Operators who did not have a license would not be able to operate.

While the proposal does include a yearly licensing fee, the $10,000 amount is quite low. It almost seems laughable that the DFS operators would propose such as small amount to have the ability to gain licensing within the state. In most gambling industries, tens of thousands if not millions are paid just for the option to offer gaming services.

Gaming Policy Committee Not Impressed

The Gaming Policy Committee of Nevada are not impressed with the proposed legislation. The committee claims that the proposal by DraftKings and FanDuel is lacking in several areas. There are no criminal background checks included, which is a necessary step in the casino industry of that state to help ensure that there is no association with organized crime groups within a gaming company.

Officials also wanted to know if the industry would be able to bring jobs to the state as well as revenues. The proposed licensing fees add up to around $30,000 a year which is not enough to cover the cost associated with regulations.

FanDuel and DraftKings are being represented by attorney Scott Ward, who stated that regulations that apply to casinos should not apply to DFS. However, the DFS operators would be willing to work with the state to come to a more agreeable proposal. Ward pointed out that the DFS companies came to Nevada because the state has a strong history in the area of gaming and other states look to Nevada as an example.

One does have to consider that the DFS companies are not legislators. They do not have the experience in creating legislation but are trying to see something done in the state so players can get back to enjoying DFS contests in Nevada.

DFS United States Update

In the United States, eight states so far have passed legislation to legalized DFS contests. New York was the most recent with Colorado, Indiana, Massachusetts, Mississippi, Missouri, Tennessee and Virginia already having legislation in place.

It will be interesting to see if legislators will work with the DFS operators to create legislation that will once again see the contests taking place within the state.