Nevada has made its opinion known.
The state with the largest gambling industry in the nation ruled Thursday that daily fantasy sports should be considered gambling, rather than the games of skill that their supports say. The decision by the Nevada Gambling Commission ordered that sites like DraftKings and FanDuel should be shut down until their owners acquire state gambling licenses.
The ruling dealt a blow to the nascent industry of online daily fantasy, one has been in trouble of late for alleged insider-trading like activities by employees at the largest companies. The F.B.I. is reportedly investigating employees at DraftKings and FanDuel for using insider information to gain advantage as competitors' sites and beat paying users in contests.
Daily fantasy sites have operated legally in most states because the law has defined it as a skill-based game. If it's treated as gambling, it's immediately illegal in almost every state.
So what is it? A skill game? Gambling? Can it be both? One way of measuring this is to consider how well a random average participant would fare in daily fantasy, contrasted to the huge but largely illegal game of online poker.
Pro poker player Andy Frankenberger believes daily fantasy is much more like gambling than online poker.
"A daily fantasy pro's competitive edge over a beginner is nothing compared to the edge of a poker pro versus a first-time poker player. Your decisions in daily fantasy can't be that bad when players' prices are efficiently set by the sites," he said.
Frankenberger spent 14 years on Wall Street trading equity derivatives before becoming a two-time World Series of Poker champion and World Poker Tour player of the year. "It's similar to how there's no bad pick in sports betting if the lines are set efficiently," he said. "But in poker, players assign their own values to each hand, and as such, the skilled player stands to gain from making better decisions." In addition to poker, he's played fantasy sports since the 1980s, and daily fantasy for several years.
"It's a joke that between online poker and daily fantasy, poker is the one that's widely prohibited in this country," said Frankenberger. "Anyone who thinks poker is not a game of skill probably hasn't played much poker."