It took a special committee less than 20 minutes on Monday (October 24) to unanimously approve Nevada’s first regulations for wagering on esports competitions, as the gaming industry looks to take advantage of the vast economic potential that competitive video games offer.
The Nevada Esports Technical Advisory Committee’s approval of the proposed regulations advances them to the Nevada Gaming Control Board (NGCB) and Nevada Gaming Commission (NGC), which will conduct public hearings and then vote on them.
John Michela, senior deputy attorney general, told the committee that the biggest change in the revised draft dated October 10 shifts gaming licensee decisions to accept esports wagers from “a per-league basis to a per-event basis.”
“This change was based on the committee’s discussion concerning amateur events with prizes sanctioned by esports leagues and the difficulty in defining esports leagues,” Michela said.
The proposed esports regulation will be included within Regulation 22, which includes the oversight of sportsbooks.
According to the regulation, a sportsbook may accept wagers on an esports event without the prior approval of state gaming regulators if the operator “obtains complete information about the video game used for the event, including, without limitation, the publisher of the video game.”
Currently, esports are treated as so-called “other events” under Nevada’s sports wagering regulations.
That means they are subject to event-specific regulatory approval, rather than the traditional sporting contests that are generally automatically eligible for wagering in Nevada.
The licensee would also have to ascertain whether the event is approved by the video game publisher, and whether the event operator has any affiliation with the video game publisher.
The regulation also requires the sportsbook to make sure the event is efficiently supervised, has integrity safeguards in place, has verifiable outcomes and those outcomes are generated by a reliable and independent process, along with how outcomes are unlikely to be affected by any wager placed.
Seth Schorr, a committee member and CEO of Fifth Street Gaming, was absent from the committee’s September 21 meeting, causing him to ask whether there had been any discussion around the process of how the NGCB chair would place an event operator on the list of approved sanctioning organizations.
“Is that something this organization will take an active role in creating that list of sanctioning organizations?” Schorr asked.
Michela admitted the issue was not discussed but under the current method in place for sanctioning organizations, an organization “can request being placed on the list or the control board chair can simply decide to place in this case an event organizer on the list.”
Schorr urged the committee to hold a discussion with the control board and its chairman early next year around this specific item to make sure there is an efficient process, and that the esports committee can continue to provide its experience to the board.
“I personally think that it’s a very important part of these regulations and I want to make there is an efficient way of creating this list,” he said.
Robert Forbes, a committee member and vice president of legal at Activision Blizzard, agreed, adding that the committee could also be helpful in evaluating those placed on the so-called “blacklist” as well.
The new regulation would grant the chair of the control board the authority to prohibit sportsbooks from accepting wagers on esports competitions, but also allows for sports-betting operators to request a review of the ban by the NGCB and NGC.
The eight-person committee, formed last year, has been considering how Nevada might regulate wagering on video game competitions.
“I think this committee has done a great job,” Schorr said. “That said, I do see quite a bit of follow-up and work that needs to be done. I don’t want to get ahead of ourselves, but I do hope as a committee we have an opportunity to discuss the next steps.”
Schorr added that should the NGCB and NGC approve these regulations, he looks forward “to regrouping then and see how this committee can help the likes of licensees and our industry take advantage of these regulations.”
“My concern is creating regulations that aren’t taken advantage of for any reason while of course making sure that the burden and work does not fall upon the control board, which it has in the past,” he said.