51°F
weather icon Clear
Pahrump, NV
Opinion

Nevada sending wrong message on daily fantasy sports ban

Special to the Pahrump Valley Times
October 21, 2015 - 8:29 am
 

Government doesn't regulate business exclusively to protect consumers. Government also regulates business to protect companies from competition.

Last week, the Gaming Control Board provided a textbook example of state-sponsored protectionism by banning Internet-based daily fantasy sports companies, including industry leaders DraftKings and FanDuel, from operating in Nevada. The order, filed Thursday, did not declare daily fantasy sports contests illegal under Nevada law. Rather, the order stipulated that daily fantasy sports contests can be offered only by businesses that have a Nevada gaming license.

So DraftKings, FanDuel and other such companies can pursue a gaming license if they want to reconnect with their Nevada customers, or licensed Nevada sportsbooks can fill that void by developing their own daily fantasy sports contests. Considering Nevada's population of less than 3 million people, not including visitors, it would be surprising if any daily fantasy sports company decided to go through the costly licensing process for access to such a small market.

The financial and bureaucratic burdens of licensure create a barrier to entry and a big advantage for existing license holders. License holders know this and embrace regulation, despite its costs. It's true for casinos, teachers, cosmetologists and any highly regulated, credentialed industry.

Daily fantasy sites allow players to enter contests in which they assign professional and college athletes to a "team" that competes against rosters compiled by other participants for cash prizes. Unlike the season-long fantasy games enjoyed by tens of millions of Americans, the contests cover play from just a single day or week. And unlike the fantasy websites that manage season-long leagues for a fee, daily fantasy sports sites distribute those fees to winners. The industry is evolving to meet the demands of its customers.

As reported by The Wall Street Journal, the U.S. Justice Department is examining whether the daily sites run afoul of a 2006 Internet wagering ban that exempted fantasy sports because of the game's skill component. Daily fantasy sites have proved wildly popular and lucrative, so much so that sports leagues and media giants are among the investors who've jumped into the business. The government inquiry is a testament to the political power of the gaming industry, which just a couple of decades ago had a less-than-savory national reputation.

Nevada's casino industry drives the state's economy. It employs more workers and pays more taxes than any other industry. And the industry's health depends on the integrity that directly results from Nevada's best-in-the-world regulatory system. Its concerns should always be heard.

But a prohibition on a mainstream website that's still lawfully marketed to and accessed by millions of Americans elsewhere seems as heavy handed as last year's state-led crackdown on ride-sharing service Uber.

Nevada should be competing to lead any technology-driven changes at the intersection of sports and entertainment, not projecting a message that it doesn't welcome new models created by outsiders.

This editorial first appeared on the Las Vegas Review-Journal website on Monday.

MOST READ
LISTEN TO THE TOP FIVE HERE
THE LATEST
Getty Images
Letters to the Editor

Where did all these experts on international law and UCMJ law (Uniform Code of Military Justice) come from?

Getty Images
Letters to the Editor

Today we see the legal and moral resistance against deporting illegal aliens, and it has become a real problem for the United States.

Getty Images
Letters to the Editor

It’s time to address the inequalities in our nation, not point fingers over who is patriot or not. We’re all Americans first and foremost.

Getty Images
Letters to the Editor

After reading the letter from a “moderate Republican”, with a severe case of TDS,

Eric Coleman/Pahrump Valley Times
BOVEE — Election results: What does it all mean?
By Philip S. Bovee Special to the Pahrump Valley Times

First, something it doesn’t mean: the Nov. 4 election is not a wholesale rejection of Trump and his policy.

(Getty Images)
Letters to the Editor

Government shutdowns are becoming almost like ‘political holidays’ for so many in government.

Getty Images
Letters to the Editor

As a moderate Republican I am just shaking my head at the mindless automatons we actually call elected officials who have been storming around causing complete chaos on Capitol Hill for two weeks.