American Indian & Federal Gaming Law

UNLV Boyd School of Law - Spring 2016

Hypo

TO: New Associate
SENT: April 24, 2016
From: Celia Fate
Subject: FW: DFS
 
New Associate,
 
As you know, I am tied up in regulatory hearings in the Bahamas for a large slot manufacturer and I can’t respond to all of my e-mails myself.  Please review and respond to the e-mail I am forwarding from Ella at the NV International Casino.
 
Thanks
 
Celia.
 
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From: O’quent, Ella [mailto:gcounsel@NVCASINO.com] Sent: Monday, April 24, 2016 To: Celia Fate Subject: DFS
 
Celia,
 
One of our board members, Tex Avery, is a close personal friend of Jerry James, the owner of the Plano, Wranglers football team in Texas.  Jerry has proposed to sell us 1/2 of his stock in Draft Duel, an online daily fantasy sports site, for 60% of the purchase price he paid a couple of years ago.  Draft Duel, as you know has been on an advertising blitz touting its service that lets players pay a fee for picking a roster of real world athletes, then comparing the real world statistics of their roster versus other players.  The player with the top score wins.   For example, for football, contestants pick a roster of one quarterback, two running backs, three receivers and a defense.  The roster is scored based on the statistical performance of the real world athletes in next week's games.  The contestant with the highest score wins a pre-determined and announced prize.
 
This would amount to about a $100 million dollar investment.  Tex has been drumming up support for the purchase with other board members.   Tex has assured the other board members that this is a sure-fire money maker and DFS is so popular that it isn't likely to present any real risk.  Additionally, Tex mentioned that Draft Duel’s business is exempt from federal gaming laws because of the UIGEA and that he and Jerry are comfortable with the site.
 
Our compliance committee has some concerns.  What I need from you is a quick response giving me a general overview of any risks, particular federal gaming aw risks with the idea.  I don't need a treatise, but I need enough information to know whether there are significant federal gaming law risks, where they are and why.
 
Ella O’Quent
Executive Vice President & General Counsel
NVCASINO  International
888 Las Vegas Boulevard South
Las Vegas, NV 89107
Phone:  (702) 383-8989
Fax:      (702) 383-8845