Brian Sandoval Calls on “Gaming Policy Committee” to Discuss Potential DFS Bill
Nevada Governor Brian Sandoval is calling a Gaming Policy Committee meeting for the first time since 2012 to discuss daily fantasy sports and other iGaming issues. The governor of Nevada calls such meetings rarely and the resulting discussions tend to be substantive. The 2012 meeting was used to discuss implimentation of the state’s online gambling policies.
In general, the Gaming Policy Committee is used to formulete potential recommendations that have a realistic chance of passing in the Nevada State Legislature. The 2012 policy group made recommendations which were used to regulate Nevada’s online poker industry when it launched in 2013.
2016 Gaming Policy Committee
The 2016 Gaming Policy Committee is expected to discuss potential laws and regulations regarding daily fantasy sports. Sandoval’s decision is the latest in what appears to be a burgeoning confrontation between the Nevada governor and his top law enforcement official, Adam Laxalt. The two have a growing rift on how they interpret online gaming in the state, with DFS one of several issues.
In October 2015, Nevada Gaming Control Board Chairman A.G. Burnett said DFS gaming in the state was illegal. Burnett’s ban came after a short review of the daily fantasy sports industry he initiated in September 2015. The announcement of the came after the Ethan Haskell scandal rocked the DFS industry. Ethan Haskell was a DraftKings employee who won several hundred thousand dollars playing on FanDuel. When Haskell accidentally posted the “draft percentages” of his starting lineup, it led DFS players to wonder whether he had used unpublished DraftKings statistics to gain an unfair advantage on FanDuel.
Though FanDuel and DraftKings launched internal reviews to determine whether wrongdoing had occurred — and quickly banned their employees from gaming on competitors’ sites — it opened the door to a wider discussion of the DFS industry’s policies. Adam Laxalt was the first of several state attorney generals who took official action, banning the companies. In Burnett’s case, he demanded DFS sites like DraftKings and FanDuel apply for a gaming license, which would be an admission that daily fantasy sports is a form of betting.
Adam Laxalt Backed DFS Ban
In the aftermath of that decision, Adam Laxalt backed the Nevada GCB chairman, saying Burnett’s decision was “well-reasoned, methodical, and a step-by-step analysis.”
Saying he was not surprised that other states were reviewing the legality of DFS gaming, Laxalt added, “Under Nevada law today, this is both gambling and sports pool betting. I don’t think anybody wants to shut out a new and lucrative business. But the way Nevada law is currently written, they didn’t fit.”
Brian Sandoval’s Stance
While Gov. Brian Sandoval might agree with the substance of the second-to-last sentence in Laxalt’s quote, he differs greatly on the approach Nevada should take to such businesses. Sandoval has a much different view towards online gaming than his attorney general and has spoken loudly in the past about those differences.
Sandoval and Laxalt have sparred in the past few months on the AG’s decision to sign on to the anti-online gambling bill in Congress: Restore America’s Wire Act. Laxalt thus believes all forms of online gambling — even online poker, which is legal in Nevada — should be illegal.
That is a bit of an embarrassment to Gov. Sandoval, because he is the one who passed the current online poker laws into law. Brian Sandoval also signed an interstate poker compact with the governor of Delaware, Jack Markell, which holds the potential for a vast expansion of Internet poker in the United States, akin to multi-state lottery associations like Powerball and Mega Millions.
Sandoval Criticial of Laxalt
Brian Sandoval blasted Laxalt in his “The gaming industry is changing and in order for Nevada’s businesses to maintain a competitive edge internationally, we must enact policies that allow the industry to meet the demands of a younger, more technologically engaged gamer. The groundbreaking online gaming bill previously passed by the legislature provides local businesses with an environment where they can grow and prosper.”
Gov. Sandoval did not stop there.
Instead, he was critical of his own attorney general’s stance, because it contradicted state law’s that their own Republican Party had enacted. Sandoval said in a press release: “Furthermore, as a former Attorney General, Gaming Commission Chairman and someone who worked with the industry and the Legislature on Nevada’s online poker legislation, I am very concerned that anyone representing the state’s legal interests would speak out against current state law in our leading industry.”
AG Burnett Takes Sides
Interestingly, A.G. Burnett took Gov. Sandoval’s side in the war of words, saying he was concerned what a ban on online poker would do to the industry, and to online gamblers from Nevada. Burnett said, “I am concerned that would mean that offshore operators would still be able to offer illegal, unregulated online poker, while licensed and suitable entities are banned from doing so.”
The governor seems to view Laxalt as a loose cannon who has taken it upon himself to change Nevada’s gaming laws. The decision to call a Gaming Policy Committee is thus seen as an attempt to seize control of policy from Sandoval’s own attorney general. Brian Sandoval is calling together key policy leaders and gaming industry leaders to build consensus on new online gaming and DFS regulations.
DFS Sites’ Take on the Policy Committee
It is speculative to say so, but this would appear to be good news for DraftKings and FanDuel. Since they and other DFS operators are banned from the state by a Gaming Control Board policy decision and an attorney general willing to back that decision, they have nothing to lose from a review of the current laws of the state. Either the Gaming Policy Committee of 2016 confirms the ban on DFS gaming (in which they’re no worse for the wear) or they write regulations which might open up Nevada to one-day fantasy sports contests again — and this time in a regulated and protected form.
Since Gov. Brian Sandoval is (in part) animated by the need to separate himself from the policies of his overreaching attorney general, one has to imagine Sandoval will prefer a regulated, licensed, and taxed DFS industry to one simply banned from activity. Signing up for such a system might be tantamount to admitting DFS is betting on sports, but by then, DraftKings and FanDuel might be willing to embrace the distinction, for the right to operate in U.S. states.
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