Nevada regulators have ordered daily fantasy-sports sites to shut down and to get a gambling license if they wish to operate in the state.

The move comes as daily fantasy companies, namely industry giants DraftKings Inc. and FanDuel Inc., face growing scrutiny over the legality of their business model and the oversight of their operations.

Daily fantasy, because it “involves wagering on the collective performance of individuals participating in sporting events,” must adhere to regulations that govern sports pools in Nevada, A.G. Burnett, chairman of the Nevada Gaming Control Board, said in a notice on Thursday. “[Daily fantasy sports] constitutes gambling under Nevada law.”

FanDuel and DraftKings both said they would cease operations in Nevada as a result of the decision.

FanDuel said the decision “stymies innovation and ignores the fact that fantasy sports is a skill-based entertainment product loved and played by millions of sports fans.” Details