Daily fantasy sports companies will need a license to operate in Nevada after a state gaming control board ruling Thursday.
All such unlicensed operations were ordered to stop operations in Nevada as of Thursday. Those that fail to comply could face felony charges, including fines and up to 10 years in prison.
"Because DFS involves wagering on the collective performance of individuals participating in sporting events, under current law, regulation and approvals, in order to lawfully expose DFS play within the State of Nevada, a person must possess a license to operate a sports pool issued by the Nevada Gaming Commission," Nevada Gaming Control Board chairman A.G. Burnett wrote after the ruling.
Meanwhile, the U.S. House Energy and Commerce Committee has been trying to organize a Congressional hearing involving the NFL as it relates to fantasy sports, but the league is trying to "ward off" a hearing sought by U.S. Rep. Frank Pallone (D-N.J.), according to reports.
"We have been informing (congressional) staff that the league and clubs have no equity interest," NFL spokesman Brian McCarthy told ESPN in an email. "We explained the difference between the daily fantasy games and the fantasy offerings from the league. It is up to the members if it has a hearing. We were communicating with staff to make sure it had our information."
FanDuel, one of the prominent daily fantasy sports businesses, argues that its offerings are based on skill and does not consider it gambling.
"The casino gaming industry has repeatedly called for greater legal clarity on daily fantasy sports," the American Gaming Association said in a statement. "We appreciate that the Nevada Gaming Control Board has provided that clarity as well as a roadmap for DFS companies and casinos to provide popular fantasy sports within Nevada borders.
"We will continue to seek additional clarity in other jurisdictions, as eliminating ambiguity is in the best interests of all parties, including consumers."
A Congressional hearing is expected to take place, but it is unknown when it would happen.
Pallone and U.S. Sen. Robert Menendez (D-N.J.) also requested a Federal Trade Commission investigation after daily fantasy operators allowed employees to play on rival sites even though they had access to information not available to the public.
"It is no surprise that the NFL does not want a hearing on daily fantasy sports," Pallone told ESPN. "They are deeply invested and are already engaging in hypocrisy by supporting fantasy sports betting while opposing sports betting at casinos and the tracks. The reality is, the daily fantasy sports industry is operating in a total void within the legal structure.
"And now with allegations of 'insider trading' by employees of fantasy sports operators and with an FBI and Department of Justice investigation, the time is past due for a hearing."
Aside from Nevada, five states -- Arizona, Iowa, Louisiana, Montana and Washington -- do not permit daily fantasy sports.