The memo also pointed to text attached to images on DraftKings’ website that used the word “betting” to describe it.
Delaware finance secretary Tom Cook, whose office oversees lottery and casino operations, said state officials are reviewing Nevada’s actions evaluating whether any of its conclusions would apply in Delaware, which allows parlay bets on NFL games as one of only a handful of states where legal sports wagering is allowed.
In less than two weeks, the two high-profile companies in the ever-growing industry had gone from being a seemingly unstoppable, untouchable force to facing intense scrutiny of their business practices and legality from investigators, lawmakers, regulators and even their own players after it was revealed employees often played on competing sites, raising questions about possible insider information being used to win.
“Even church fundraisers for bingo night have some oversight. This material may not be published, broadcast, rewritten, or redistributed. They try to assemble teams that earn the most points based on real-life stats in a given period with a certain percentage of top finishers earning a payout.
Michigan has been reviewing if the state’s criminal gambling laws apply to daily fantasy sports before Nevada’s decision Thursday, but “obviously it’s something that would be taken into consideration,” said Michigan Gaming Control Board spokeswoman Mary Kay Bean.
“It appears that although the sites’ representatives publicly state that they do not believe daily fantasy sports involve ‘wagers’ or ‘bets,’ they do use the terms ‘betting’ and ‘wagering’ when they are not dealing with law enforcement agencies,” the memo noted.
California Assemblyman Adam Gray, D-Merced, who introduced a bill to legalize fantasy sports there, said Nevada’s decision provided more evidence of the need for oversight.
Mississippi’s gambling commission is also looking into the issue. DraftKings and others in the fantasy sports industry, including competitor FanDuel, have insisted their sites aren’t gambling and are legal under a 2006 federal law that exempted fantasy sports from an online gambling prohibition.
A day after Nevada regulators ordered the sites out of the state unless they get a gambling license, a memo issued Friday cited a three-year-old online “Ask Me Anything” interview on Reddit.com where the office of the state’s attorney general said DraftKings CEO Jason Robins compared his site to a casino and described the concept as a mashup between poker and fantasy sports. DraftKings said in its email to customers it would work to ensure Nevada residents could play on the site again soon without saying how they would do so.
Participants on the unregulated sites can compete in games involving professional or college sports, paying an entry fee that goes into a larger pool. The Associated Press contributed to this report. The group’s executive director, Alan Godfrey, said the Nevada decision could have influence elsewhere.
DraftKings did not immediately respond to requests for comment.
CBS has an investment in FanDuel of less than 1 percent of that company’s value.
2015 CBS Interactive Inc. All Rights Reserved. With the amount of money we’ve seen and the amount of participation we’ve seen in California and across the country, we’ve got to have some regulation,” he said in a telephone interview.
LAS VEGAS — As more states scrutinize the daily fantasy sports industry, the office of Nevada’s attorney general said it used DraftKings’ own words and online images as evidence the sites qualify as gambling.
At least four lawsuits have been filed against DraftKings and FanDuel by customers who argue they never would have played had they known employees with insider knowledge were playing on rival sites.
Nevada’s determination is being watched by other states and lawmakers weighing whether the sites constitute gambling or not based on their own laws.
Like the ride-hailing app Uber before it, the two titans of the daily fantasy sports industry sent links to an online petition to Nevada customers.
The sites will likely be making their case for legalization across the country, if they haven’t already, as lawmakers and regulators pour over their own gambling laws and wonder where sites like DraftKings and FanDuel fit in.
A Pennsylvania lawmaker that had originally proposed legalizing the sites now wants to ban daily fantasy sports unless their operated by the 12 casinos in the state.
A transcript of the interview that remains online doesn’t identify Robins by name but an introduction indicates the three men who started DraftKings were answering the questions.
On Friday, DraftKings and FanDuel took a cue from another prominent tech company spurned by Nevada that was eventually welcomed back: get an angry public to petition lawmakers and make it legal.
Neither DraftKings or FanDuel have said if they’ll pursue a license in Nevada, a process that costs $500 up front as well as hourly costs and travel expenses to cover the intense background investigation by state agents into the companies and their leaders. In Ohio, the issue is for state lawmakers since the contests don’t fit neatly into state’s definition of casino games.. Some prizes top $1 million.
Illinois regulators think daily fantasy sports is illegal under a state law prohibiting Internet gambling, but they plan to ask their state attorney general for a legal opinion next week.
Entry fees on DraftKings range from 25 cents to more than $5,000