Daily fantasy still not part of Nevada’s sports betting line-up despite recent investments

Daily fantasy still not part of Nevada’s sports betting line-up despite recent investments

  • Howard Stutz
January 30, 2021 10:00 AM

Nearly six years ago, Nevada put the kibosh on daily fantasy sports operators.

The Gaming Control Board, based on a research memo authored by the state’s Attorney General, banned unlicensed fantasy sports websites from providing their product to Nevada customers.

The reason?

Nevada Gaming Control Board Chairman J. Brin Gibson/courtesy photo

“Daily fantasy sports constitute sports pools and gambling games,” Brin Gibson, then-chief deputy attorney general for gaming and government affairs, wrote in the October 2015 memo. “They may also constitute lotteries, depending on the test applied by the Nevada Supreme Court. As a result, pay-to-play daily fantasy sports cannot be offered in Nevada without licensure.”

Shortly after the memo was provided to gaming regulators, then-Control Board Chairman A.G. Burnett issued a cease-and-desist order, effectively banning the daily fantasy sites, such as DraftKings and FanDuel, from operating in Nevada. The sites could apply for a sports pool license but needed to partner with a licensed casino operator.

Former GCB Chairman A.G. Burnett

Fast forward. Gibson is now chairman of the Gaming Control Board, appointed last November by Gov. Steve Sisolak. Burnett is an attorney in Reno with Nevada-based McDonald Carano.

Both remain firmly committed to the memo and order. They consider it one of the best researched and well-thought-out decisions to affect Nevada gaming. DraftKings and FanDuel, which controlled 90% of the daily fantasy market, withdrew from the state, although they circulated petitions to Nevada customers encouraging them to sign in opposition to the order.

I bring up this history because daily fantasy sports is once again on the gaming industry’s radar.

Sports betting consultant Sara Slane

In separate deals announced last Monday, casino operators Bally’s Corp. and Caesars Entertainment both said they were acquiring the operations of two daily fantasy sports sites.

Monkey Knife Fight, which Bally’s is buying in an all-stock deal valued at $90 million, bills itself as the third-largest daily fantasy site with 180,000 registered users and 80,000 depositing players across 37 states, Washington, D.C., and Canada. SuperDraft, which Caesars is acquiring over a certain time frame for an undisclosed price, didn’t provide its user totals but said it offers daily fantasy contests covering seven professional sports in more than 35 states.

“It’s all about customer acquisition,” said sports betting consultant Sara Slane. “It gives the sportsbook operators a presence in a state that doesn’t allow live sports betting. For now, it’s an entry point.”

Daily fantasy players have free options on media sites, including Yahoo, ESPN, and CBS Sports, all of which have sports betting partners.

Legal sports betting is now available in 20 states and Washington, D.C. Five states have legalized it and are expected to launch this year after regulations are drafted. American Gaming Association CEO Bill Miller said another 12 states are considering sports betting legislation.

For Bally’s and Caesars, adding a daily fantasy sports channel may not move the financial needle, but it does give the companies a presence.

“The acquisition will allow Bally’s to leverage both its current customer database, as well as DFS’s collection of depositing players,” Bally’s CEO George Papanier said. “These assets will also provide Bally’s with a significant advantage in launching its own sports betting operations.”

Bally’s, which is adding a sports betting operation through its purchase of Bet.Works, is acquiring the operations of the MontBleu Resort in Lake Tahoe, which gives the company its first Nevada casino. (Bally’s Las Vegas is owned by Caesars). Caesars has 16 properties in Nevada, with its sportsbooks managed by William Hill US.

Will the companies now offer daily fantasy sports in Nevada?

FanDuel app

Gaming regulators still require operators to be approved for daily fantasy in order to offer the product to customers. They view the bets as unique parlay wagers.

Las Vegas-based US Bookmaking was licensed to offer daily fantasy sports when it operated a sportsbook at a small Northern Nevada casino. US Bookmaking President Vic Salerno said the company had 50 satellite locations around the state, but customer demand for daily fantasy “as we operated it” just wasn’t there.

Meanwhile, DraftKings and FanDuel have moved on to sports betting. DraftKings has mobile and/or retail sports betting operations in 14 states; FanDuel offers sports betting in 10 states.

Both companies are still the behemoths in the daily fantasy sports market. Neither company, however, has found its way into a Nevada sportsbook.

FanDuel’s sports betting partnership with Boyd Gaming covers the casino operator’s regional properties outside Nevada. DraftKings opened corporate offices in Las Vegas a year ago to manage customer experience, sportsbook traders, and other services.

DraftKings’ North America President Matt Kalish said at the time that Nevada “is ground zero for sports betting, and we need to be a part of that market.” What that might look like is still to be determined.

“We’re working on that now,” Kalish said 12 months ago.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at  hstutz@cdcgaming.com. Follow @howardstutz on Twitter.