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The efforts by several states to crack down on illegal, unregulated online sweepstakes websites have garnered support from the leading trade association that represents the regulated gambling industry, including a bill to strengthen enforcement measures in Nevada.
Existing state law prohibits various illegal activities when it comes to gambling, including provisions to prohibit persons from engaging in gambling without a state gambling license and cheating or manipulating casino games.
However, Nevada law does not include language to seize assets from illegal gambling.
Senate Bill 256, authored by Democratic Senator Rochelle Nguyen, would require any operator found to have operated illegally in the state to disgorge all earnings, with the funds directed to Nevada’s general fund.
The new bill also proposes upgrading some offenses from misdemeanors to felonies, increasing the legal consequences for participating in illegal gambling. A prison sentence could range from one to ten years, with fines from $10,000 to $50,000, according to the proposal.
Nguyan’s bill also would allow Nevada to prosecute illegal gambling operators even if they are based outside the state, as long as they accept bets from Nevada residents. The measure proposes to penalize individuals who fail to report, pay, or truthfully account for licensing fees and taxes imposed by Nevada gambling regulations.
Tres York, senior director, government relations with the American Gaming Association (AGA), said the trade association strongly supported the passage of SB 256.
“We urge both chambers to approve this legislation to better protect Nevadans from the scourge of illegal gambling and give gaming regulators, law enforcement, and the judiciary more effective tools to combat illegal operations,” York said in written testimony submitted to the Nevada Senate Judiciary Committee.
“Illegal gambling is a longstanding problem across the country, not just in Nevada,” York wrote.
“Not only do illegal gambling operations put Nevadans at risk by offering no responsible gaming protocols, know your customer requirements, guaranteed payouts, and more, but they also drain money out of Nevada that would otherwise be collected in tax revenue.”
York also stated that SB 256 would ensure that those active in illegal gambling operations will not benefit from those activities in any way and serve as a deterrent for other individuals who may want to engage in similar illicit activity.
The proposed legislation was discussed in a public hearing last week by the Senate Judiciary Committee, where various business groups, including the Association of Gaming Equipment Manufacturers (AGEM), the Vegas Chamber of Commerce, and the Nevada Resort Association, all spoke in support of the bill.
Previously, the Senate Judiciary Committee held a February 27 public hearing on Senate Bill 46, a gaming reform measure submitted by the Nevada Gaming Control Board (NGCB). That bill would codify long-standing practices pursuing disciplinary action and tax collections even when individuals surrender their gaming license or leave their job with a licensed gaming company, among other provisions.
Both bills remain pending in the committee.
The NGCB confirmed Monday (March 17) that it does not have an official position or comment on SB 256 because it is not an agency bill and therefore the regulator is neutral on the measure.
“AGEM and its members of supporting efforts on combating unlicensed gaming in this state, as well as every other commercial and tribal gaming jurisdiction across the United States and in those regulated markets around the world,” said Daron Dorsey, CEO and president of the association that represents gaming suppliers.
Dorsey reminded the committee that there are several significant large-scale operators of various types of illegal gambling, whether sweepstakes or in other forms.
“It seems that problem is only growing,” said Dorsey. “We hope SB 256 will discourage illegal sites from targeting Nevada in the first place.”
