The expansion of USFantasy to racetracks and other wagering venues beyond Nevada is just a matter of time.
How much time?
This is where USF President Vic Salerno begins talking about the speed at which all who influence the shape of state and federal regulations get to work on the needs of new approaches to adult entertainment.
USFantasy will probably be in business by August with a menu of daily fantasy sports wagering concepts based on a pari-mutuel platform identical to that used at racetracks just about everywhere. But this approach requires that attorneys general see DSF as a game of skill rather than gambling.
There is nothing wrong with either approach but regulators are slow to abandon their tendency to write regulations for whatever they can get their collective arms around. Games of skill and gambling have historically gotten different approaches from the influences intent on making sure concepts such as fantasy sports wagering fit nicely into one category or another.
Salerno believes the pari-mutuel approach to game playing designed by him and his partners makes the most sense considering the current shape of regulations in most jurisdictions. It can of course also be seen as another form of gambling, which is the view taken by most Nevadans who do not flinch in the face of entertainment concepts labeled as gambling.
It’s just a matter of which label best fits the environment in which business is to be conducted. Is it a game of skill, kind of like chess, or
is it gambling? Take your pick.
Salerno and USF flew through the licensing process in Nevada where he has been a licensed and respected bookmaker for years.
Daily fantasy game playing or gambling was never illegal in Nevada, a mistake some writers made last year when the Gaming Control Board ordered the two DFS biggies, FanDuel and DraftKings, to stop doing business. The Board saw their products as gambling and said companies offering such action needed to get sportsbook licenses.
This meant coughing up all the fees and assorted charges required by a suitability investigation that might drag on for months. That’s the way it is in most states offering commercial gambling activities.
FanDuel and DraftKings quickly reacted to this order as though they had sniffed a noxious odor, saying thanks but no thanks, they would take their business elsewhere to locales where their “games of skill” were generally unregulated, the rules much less cumbersome. Translation: less pressure on potential profits.
The brain trust at what was to become USFantasy had long ago recognized the opportunities for offering daily fantasy action on a pari-mutuel platform, since pari-mutuel activity already has a comfortable fit in a number of states from California to New York and Florida. But they did not decide until last year to create a new company around this thinking.
Horse racing and fantasy wagering have long been the beneficiaries of carve-outs designed by lawmakers and their influential friends who enjoyed watching horses run around a track while making wagers on the outcome, but in the name of safe-guarding public morals had no use for illegal gambling.
The same influences – well, some of them, also made certain fantasy wagering was seen as based on skill and was not defined anywhere as illegal gambling.
Imagine what the world would be like if a round of golf with a little money riding on the outcome was seen as illegal gambling.
But rules are written and enforced by lawyers who have highly developed senses of direction for finding loopholes. It’s the difference between a game of skill and illegal gambling.
Federal and state prosecutors call on the same sense of smell, so to speak, when considering investigations likely to produce big headlines, headlines bigger than those associated with other not-so-sexy white collar criminal activity.
“Illegal gambling” will always get attention.
That’s why USFantasy’s principals are following the changing shape of gambling’s – uh, game playing’s changing landscape as they stay on top of developments in California, which may soon offer a lot of opportunity.
Salerno and the USF team have talked with all the California tracks about adding the USF menu to their regular list of pari-mutuel options. Unofficially, all the tracks are interested. The problem there is California’s AG has not yet decided whether daily fantasy sports wagering is a gambling opportunity or a game of skill.
Pending legislative action may give him the answer he wants.
Salerno wants that opinion before doing business there. The doors to opportunity are expected to open quickly in other states such as Indiana, Minnesota and Pennsylvania where legislation and rule-making to allow fantasy action are being put in place.
Federal prosecutors are looking at the fantasy wagering business in Florida and New York. This is a time for patience. As football season approaches he believes Nevada will keep him busy for the time being.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: