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 The decision came a week after U.S. Senate Democratic leader Harry
Reid of Nevada called on Congress to examine fantasy sports services
after reports that an employee with access to insider information
placed bets in the unregulated multibillion-dollar industry.
In a single-page notice on its website, board chairman A.G. Burnett
said daily fantasy sports contests where players wager money fit the
definition of gambling that requires a license from the Nevada
Gaming Commission to operate a sports pool.
Any companies offering daily fantasy sports without a gambling
license in Nevada were ordered to cease and desist immediately,
Burnett said. However, gambling licensees with approval to run a
sports pool may offer fantasy sports as well, he added.
The two largest U.S. fantasy sports companies, FanDuel and
DraftKings, both operate in Nevada and hold large-scale events and
tournaments in Las Vegas, the gambling capital of the United States,
but neither possess a state gambling license. Both companies are
privately held.
 DraftKings, whose investors include the National Hockey League and
Major League Soccer, said it strongly disagreed with the decision.
The company "will work diligently to ensure Nevadans have the right
to participate in what we strongly believe is legal entertainment
that millions of Americans enjoy," it said in a statement.
FanDuel said it was disappointed with the regulators' decision "that
only incumbent Nevada casinos may offer fantasy sports," adding that
the company would examine its options while complying with the
order.
The fantasy sports industry, which has exploded in popularity in the
past few years, allows paying participants to assemble imaginary
teams from rosters of real players and to accumulate points based on
how those players perform in actual games. This has enabled fans to
spend money on the games with a frequency that critics say is akin
to sports betting.
Purveyors of fantasy sports argue that it is a skills-based
entertainment product, not gambling.
Casino and gaming companies such as MGM Resorts International
<MGM.N> and sports book companies such as William Hill Plc <WHM.L>
have been frustrated that fantasy sports companies are able to offer
what they considered unregulated gambling.
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The American Gaming Association, the trade group for casinos and
gaming companies, said in a statement Thursday that Nevada gaming
regulators had provided a road map for companies and casinos to
provide fantasy sports in the state.
"We will continue to seek additional clarity in other jurisdictions,
as eliminating ambiguity is in the best interests of all parties,
including consumers," the chief executive and president of American
Gaming Association, Geoff Freeman, said.
Joe Asher, CEO of sports book company William Hill US, said in a
statement that the notice "speaks for itself" and should not come as
a surprise.
Nevada's Burnett told Reuters in August that daily fantasy sports
contests "blur the line between skill and chance."
Daily fantasy sports companies now operate in at least 45 U.S.
states, though some are considering reviews on whether the activity
should be treated as gambling.
New York Attorney General Eric Schneiderman has opened an inquiry
into FanDuel and DraftKings after a scandal broke recently that
employees at the companies were winning money on their rivals'
websites.
Separately, the U.S. Justice Department and the Federal Bureau of
Investigation are looking into the business model of daily fantasy
sports operators and trying to determine whether they violate
federal laws, according to media reports.
(Reporting by Liana B. Baker from New York; Writing and additional
reporting by Steve Gorman in Los Angeles; Editing by Leslie Adler,
Kim Coghill and Gopakumar Warrier)
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