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A bill strengthening enforcement measures in Nevada by allowing for increased penalties against unregulated online sweepstakes and other illegal offshore websites continues to garner bipartisan support from legislators wanting to protect the state’s largest industry.
Senate Bill 256, authored by Democratic Senator Rochelle Nguyen, would allow Nevada courts to impose stiffer fines beyond the $50,000 fine illegal operators currently face for violating the state’s gaming laws, while converting certain offenses from misdemeanors into gross misdemeanors.
Existing Nevada law includes provisions to prohibit persons from engaging in gambling without a state gaming license; however, state law does not include language to allow for the seizure of assets from illegal gambling.
“There are a large number of significant operators of various types of illegal gaming sites, whether illegal sweepstakes or other forms of gaming activity that continue to proliferate in states and countries abroad,” said Daron Dorsey, president and CEO of the Association of Gaming Equipment Manufacturers (AGEM).
Dorsey told the Assembly Judiciary Committee on Thursday (May 1) that AGEM applauds the efforts in several states across the country to combat various forms of illegal gambling activity, because “illegal gambling hurts licensees and the public alike”.
“We believe that makes sense, as the disgorgement of profits from illegal activity is another avenue that will help punish illegal operators,” Dorsey said. “We hope the enactment of SB 256 will discourage illegal operators from targeting Nevada residents in the first place.”
Although more than a half-dozen states have seen bills introduced to either restrict or prohibit sweepstakes casinos, Montana is now poised to be the first state to implement a statutory crackdown on online sweepstakes casinos after both the House and Senate approved Senate Bill 555.
Republican Governor Greg Gianforte needs to sign or veto the measure that amends state gaming laws to specify what illegal online gambling entails.
Dorsey confirmed that AGEM had discussions with the Nevada Gaming Control Board (NGCB) on Nguyen’s bill and its language.
The NGCB has not taken an official position or commented on SB 256 because it is not an agency bill and, therefore, the regulator is neutral on the measure.
“We believe the gaming control board does not have any concerns with what SB 256 proposes to do,” Dorsey said.
The Senate approved the bill on April 7 by a 21-0 vote, with one senator excused. The Judiciary Committee held a public hearing on Nguyen’s bill on Thursday, and should it approve the legislation, it would be sent to the Assembly floor for debate and possible passage.
The Nevada Resort Association (NRA) and Vegas Chamber of Commerce, also spoke in favor of the bill.
“We see this as a really important penalty and disincentive to illegal gaming in the state,” Virginia Valentine, president and CEO of the NRA, told the committee.
Assemblywoman Erica Roth, a Democrat, pointed out that there may be some jurisdictional issues with a lot of illegal gambling operators based overseas.
Roth asked how many prosecutions of illegal operators have there been under Nevada’s current statutory framework.
Neither Nguyen nor Dorsey had that figure available at Thursday’s hearing.
“Will this be the 100 percent solution? No. But it does give them another tool in the toolbox,” Nguyen said.
All illicit profits obtained from illegal gambling operators will be directed to the state’s general fund.
Trey Delap, executive director of the Nevada Council on Problem Gambling (NCPG), wrote in support of SB 256, saying the measure was a necessary step to protect the integrity of the state’s regulated gaming industry.
While NCPG supports the bill as written, Delap encouraged lawmakers to consider an amendment that directs a portion of the disgorged funds to the Revolving Account to Support Programs for the Prevention and Treatment of Problem Gambling, established by gaming regulations.
“This would ensure that some of the funds derived from unlawful gaming activity are reinvested into essential programs that address the harm caused by gambling addiction,” Delap wrote.
