Las Vegas casinos not rushing to join daily fantasy game
LAS VEGAS (AP) Casinos and sports books, the only companies who can legally offer daily fantasy sports sites in Nevada, are instead watching and waiting from the bleachers.
It has been more than a week since Nevada regulators told the daily fantasy sports industry to get a gambling license or get out, and before they made their exits, the top two companies inferred regulators were playing favorites to protect Nevada’s golden ticket: casinos and sports books.
On Friday, DraftKings reiterated in an emailed statement, ”we understand that the gaming industry is important to Nevada and, for that reason, Nevada is taking this exclusionary approach against the increasingly popular fantasy sports industry.”
There was no playing favorites, say state regulators and casino operators.
The state’s sports books, for one, haven’t suffered with the recent existence of daily fantasy sports. They kept $227 million of what was bet on football, basketball, baseball and other sports last year, up 61 percent since 2011, according to Nevada Gaming Control Board statistics.
While last week’s legal opinion opened the door for already-licensed gambling establishments to enter the daily fantasy sports game in Nevada, none appear to be rushing to join.
”No brick-and-mortar wants to put their license at risk,” said Chris Jones, a gambling industry analyst with Union Gaming. ”I don’t think the operators will get involved until there’s much better clarity.”
Those lucrative gambling licenses, a result of intense background investigations by Nevada agents who aim to root out unsavory characters from an industry that’s only a few decades removed from its mob past and wants it to stay that way, keep their multi-billion dollar operations humming.
They may have clarity in Nevada, but they don’t have it outside the state’s boundaries. The intense scrutiny and investigations by federal authorities, plus a warning from Nevada’s regulators to keep their distance from unlicensed daily fantasy sports operations, also hasn’t engendered any sort of confidence about stepping into the fray.
Plus, the daily fantasy sports model has relied on large numbers of new players entering in order to promise big prizes to the minority who win. Nevada doesn’t have the population.
”When you parse it all out state by state, you dwindle the pool so much that it’s not attractive to the players,” said Sue Schneider, an Internet gambling expert who started the Interactive Gaming Council trade group in 1996.
Online poker was once an alluring prospect for casinos interested in getting in on an industry estimated to be worth billions of dollars in possible revenue, however, it hasn’t been as lucrative as expected. It invites a small pool of possible players residing in three states where it’s legal and regulated, including Nevada. Only one of the major casino companies, Caesars Entertainment Corp., has any online poker presence and even then, its World Series of Poker revenue is less than its online social games.
”At this point they’re probably just waiting for the dust to settle,” Schneider said of the casinos.
MGM Resorts, for one, owner of several Las Vegas Strip casino-hotels, says it’s ”not focused on participating in the daily fantasy market at this time.” But MGM spokesman Clark Dumont said in a statement that the company hopes the daily fantasy industry will return to Nevada in the future, going so far as describing it as an ”innovative brand of entertainment.”
The interactive arm of Caesars Entertainment looked at the industry a couple years ago but has no plans to get in the business itself. Neither does sports book operator William Hill.
Barry Leiberman, a gambling lawyer who represents the South Point casino-hotel south of Las Vegas, said he doesn’t expect that property to copy the DraftKings and FanDuel model.
”The issue, of course, is the technology to operate it,” he said. South Point doesn’t have it, and Nevada regulators have cautioned those with licenses to keep their distance from the companies that aren’t licensed.
Leiberman said he didn’t consider it an effort for the state to protect its own.
”What it’s doing is calling fantasy sports what it is,” he said. ”Do you pay money to get into the contest, and do you get money back when you win. And if so, that’s gambling.”