LAS VEGAS (AP) — A new gambling platform set for approval Thursday in Nevada will further blur the lines between sports betting and fantasy sports, coming as the daily fantasy sports industry argues in the face of legal challenges across the country that its games are not gambling.
The Nevada Gaming Commission is expected to back a gambling license for Henderson-based US Fantasy. The newly developed sports system essentially blends both forms of wagering but with different ways of paying out prize money to create a model that declares fantasy sports betting is gambling.
Owner Vic Salerno said his model could easily be reframed to fit states that have approved guidelines allowing fantasy sports to operate. But an industry leader predicts it won’t have a major effect on fantasy sports overall because it may only work in Nevada, where sports betting is already legal.
In the US Fantasy system, users bet against each other on individual player stats, with a pot of prize money that can change depending on how many people are betting and how much they bet. Using football as an example, a user can wager that Tom Brady will throw the most yards that week.
In traditional fantasy sports, users generally pick a group of players to create a team, and if they win, they know they are getting an established payout. In the football example, Tom Brady’s performance would help rack up points along with the rest of the players of the imaginary team.
US Fantasy also has a separate jackpot in which gamblers can pick multiple top players on one bet — mimicking fantasy sports’ drafting process — with a guaranteed payout that rolls over if there is no winner, similar to a lottery, Salerno said. US Fantasy will offer 11,000 sports events annually for betting.
Fantasy sports officials say that strategically analyzing statistics about individual players to form a winning team is a skills-based contest, not a game of chance like gambling. But Salerno said the industry is playing with semantics to avoid gambling regulations and oversight.
“All fantasy (sports) is betting on athlete performances,” said Salerno, a longtime figure in Nevada’s gambling industry.
Several states over the past year have challenged the industry, which first drew widespread scrutiny last year amid a flurry of advertising that promised the savviest sports fans millions of dollars in payouts.
The popular DraftKings and FanDuel platforms ceased operations in states such as Illinois, New York and Nevada, where they were accused of operating as illegal, unregulated betting systems.
The industry has lobbied states to approve laws that would allow them to operate without legal ambiguity. So far, Virginia, Indiana, Tennessee, Missouri, Mississippi and Colorado legislators have done so, while New York’s governor has yet to sign off on the state’s version.
In Nevada, regulators have urged fantasy sports sites to apply for gambling licenses, a move the industry opposes as too costly and time consuming.
DraftKings operates in dozens of states, according to company spokeswoman Femi Wasserman. She declined to comment on the US Fantasy proposal but said its payout system is not the same as the Boston-based company’s model. New York-based FanDuel didn’t respond to a request for comment.
Peter Schoenke, chairman of the Fantasy Sports Trade Association representing 300 operators, said he has not seen US Fantasy’s system.
“Is it truly a fantasy game or some sort of contest or instrument that is a regular gambling product? The industry is curious what exactly it is,” Schoenke said.
The hallmarks of fantasy sports are analyzing professional sports players’ stats and camaraderie among contestants in a league, he said. Neither is required with Salerno’s hybrid platform, though “fantasy sports” is a loose term that does not have a uniform definition, he said.
“It doesn’t feel like fantasy if you’re not putting up your knowledge against someone else,” Schoenke said.
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