Daily Fantasy Sports Scandal: Harry Reid Backs Nevada's Call For Regulations

The Nevada Gaming Control Board received support Saturday from one of the Senate’s most powerful leaders, as Senate Minority Leader Harry Reid, D-Nev., has backed the board’s determination that fantasy betting is a form of gambling, Roll Call reported. The NGCB said Thursday it wanted to require fantasy sports operators to be licensed because the competitions constitute gambling.

Thursday, Nevada banned fantasy sports statewide. FanDuel and DraftKings, some of fantasy sports' biggest operators, suspended service in Nevada after the board made its announcement, according to CNBC.

The announcement from Nevada comes on the heels of investigations from the U.S. Department of Justice and the FBI over the legality of the companies that operate daily fantasy sports. The industry has said such competitions are not a form of gambling because they require skill.

Daily fantasy sports have come under more scrutiny in the past month after it was revealed a DraftKings employee won $350,000 on rival site FanDuel. It was alleged that the employee used insider information.

“We have seen reports of insider betting and of young people gambling thousands of dollars a day with these unregulated companies,” Reid said in a statement, according to Roll Call. “Until now, the websites offering daily fantasy sports have been operating in what is at best a legal gray area.”

Reid also said corruption will spread if daily fantasy sports continue to be unregulated. Last month, Reid told Roll Call the companies in charge of fantasy sports should keep track of the money being exchanged online.

Offering winnings in the thousands of dollars, the industry continues to attract players, with some 40 million expected to play this year.

“I hope other states follow the lead of Nevada,” Reid said, according to KSNV-TV in Las Vegas.