United States: Gaming Legal News: Nevada Examines Its Regulatory Approach To Daily Fantasy Sports

The nationwide controversy over daily fantasy sports (DFS) and how it is regulated has led Nevada Governor Brian Sandoval to convene the Nevada Gaming Policy Committee for the first time since 2012.

Sandoval wants the Policy Committee to devise recommendations that will “allow Nevada to continue to lead the nation and the world in developing and maintaining the best policies and practices involving the regulation of the gaming industry.” This discussion, which is meant to lead to innovation in how Nevada will deal with the quickly changing world of interactive and skill-based gaming in addition to DFS offerings, is vital to understanding how Nevada can remain the leader in the gaming industry and tap into the huge interest in DFS-style offerings by today’s market.

The state kicked off the nationwide discussion over whether DFS should be regulated as gaming last October, when the Nevada Attorney General’s office issued an opinion that DFS offerings were sports wagering, leading Nevada’s gaming regulators to announce that Nevada gaming licenses would be required for DFS websites to offer their product to Nevada customers. Several other states’ Attorneys General followed suit, forcing the issue to the top of almost every state’s list of hot legal topics.

Sandoval has asked the Policy Committee to “gather information and provide recommendations on what is the best policy for Nevada’s gaming future” as it regards DFS, among other issues. As the world’s gold-standard gaming regulator, Nevada often assumes a leadership role on gaming issues.

The Policy Committee was last convened in 2012 to discuss how Nevada should regulate interactive gaming. The 2012 Committee’s efforts resulted in legislation enabling Nevada to enter into interactive gaming agreements with other states. Prior to that, the full group had not met since the 1980s.

The Policy Committee is chaired by Sandoval and includes among its 12 members representatives from Nevada’s gaming regulators (Tony Alamo, Chairman of the Nevada Gaming Commission, and A.G. Burnett, Chairman of the Nevada Gaming Control Board), Nevada legislators, and members of the public and the gaming industry (including Jim Murren, CEO/Board Chairman of MGM, and Keith Smith, President of Boyd Gaming Corporation).

The Committee will consider input from various constituencies, including the public, on DFS and other timely gaming policy issues and will craft recommendations for the Control Board and Gaming Commission. The recommendations of the Committee are not binding on the gaming regulators but merely advisory.

The Committee’s initial meeting on March 7 served mainly as a forum for experts in the gaming industry and leaders of the DFS movement to share relevant research and information. Presenters included Chairmen Alamo and Burnett, representatives of the American Gaming Association (AGA), the Nevada Resort Association (NRA), the Association of Gaming Equipment Manufacturers (AGEM), the CEOs of DraftKings and FanDuel, and academic and legal gaming experts, including Dickinson Wright attorney Greg Gemignani, who is a long-time professor in gaming law at the UNLV Boyd School of Law.

The discussion regarding skill gaming and interactive gaming included that Nevada needs to ensure that its regulations allow for speedy innovation to remain relevant for a younger generation that will want to see games that incorporate social media and video-gaming concepts. Marcus Prater of AGEM noted that he hopes that gaming manufacturers will have hybrid games of skill and chance on Nevada’s casino floors by early summer.

The DFS discussion, however, dominated the day, and several themes became apparent throughout the meeting. First, almost all agreed that DFS can be “good” – in that it has sparked clear nationwide and even worldwide interest – and that it needs to be incorporated in Nevada in some fashion to allow our gaming industry to remain competitive. Everyone at the hearing also agreed that DFS offerings must be transparent and regulated to protect both consumers and the reputation of the gaming industry.

Where the consensus began to break down was in how such regulation should be structured. Several voiced concerns that Nevada’s regulations need to be adjusted to keep pace with innovation and to allow for a greater number of content providers to contribute. Others noted that the black market for sports wagering far outpaces the legal market and put forth an argument that can be summed up as “citizens are going to find a way to wager on sports, illegally or legally, so we may as well craft regulations to protect them when they do so.”

Nevada’s gaming licensees’ concerns centered on concepts of fairness. In particular, licensees want the opportunity to take part in the booming DFS industry but are concerned that even if DFS offerings were to be legalized in some form in Nevada, they could still put their gaming licenses in jeopardy by partnering with DFS companies if the DFS offerings violate federal law or the laws of other states where they are being offered.

The DFS operators, while agreeing that they are open to some form of regulation, argued that what they offer is not well suited to what they termed Nevada’s “onerous” regulations for gaming licensees. They are requesting Nevada to create a “new box” for DFS offerings to be regulated.

Finally, the sword of Damocles hanging overhead is the fact that there are at least two U.S. Attorneys that are investigating DFS operators for violations of federal law. If a federal court determines that DFS offerings equal sports wagering, much like the Nevada Attorney General did several months ago, then federal laws, including the Wire Act, could make unlicensed DFS offerings illegal nationwide, despite any state regulations to the contrary.

In addition, a big issue hampering Nevada from taking fast action on this issue is the fact that its Legislature meets only every second year, with the next legislative session not until February 2017. This means that, short of calling a special session, any changes to Nevada’s gaming laws to accommodate DFS-style gaming will be on hold until next year.

While the Committee ponders how to deal with the offerings from companies like FanDuel and DraftKings, however, DFS is showing some signs of life in Nevada. Vic Salerno, a long-time Nevada gaming business operator, has applied to become the first Nevada-licensed gaming operator to offer DFS-style wagering with his new venture, U.S. Fantasy (USF). Through USF, he will offer a fantasy sports product that allows players to make fantasy-type sports wagers utilizing the existing pari-mutuel system. USF will be Nevada-licensed and will operate under existing Nevada gaming statutes and regulations.

The Committee determined that it will meet three more times during 2016: in May to discuss interactive and skill gaming issues, in August to focus on DFS, and then again in the fall to deliberate and craft its findings and recommendations. These recommendations will be delivered to the Governor, the Nevada Gaming Commission, and the Nevada Gaming Control Board just in time to craft legislation for the 2017 Nevada Legislature to consider.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Jennifer J. Gaynor
Kate C. Lowenhar-Fisher
Jeffrey A. Silver
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.