Nevada Streamlines Regulations, Esports Betting Back On Agenda

September 22, 2023
The Nevada Gaming Commission has granted final approval to eliminate more than a dozen regulations that the agency’s staff deemed obsolete earlier this year, paving the way for commissioners to consider finalizing new esports betting regulations next month.

The Nevada Gaming Commission (NGC) has granted final approval to eliminate more than a dozen regulations that the agency’s staff deemed obsolete earlier this year, paving the way for commissioners to consider finalizing new esports betting regulations next month.

Among the regulations that received final commission approval on Thursday (September 21) was Regulation 14.105 which eliminated the prior requirement that a licensee not install or use a system-based game or system-supported game without prior written approval of the system network from the chair of the Nevada Gaming Control Board (NGCB).

Additionally, any modifications to the approved network implementation had to be approved by the NGCB chair.

Commissioner Ogonna Brown expressed concern that the change could weaken the ability of Nevada regulators to regulate casino games and systems.

“The change there is to remove the requirement that an operator who wants to install a system game get that installation approved ahead of time,” explained Jim Barbee, chief of the Nevada Gaming Control Board’s Technology Division. “What that process would involve, is have them complete an application to submit that would also include the documents [explaining] their infrastructure.”

Repealing the requirement, Barbee said, will eliminate a hurdle to installing a system-based game, without lessening the control board’s ability to regulate it through several ways.

“First, we approved that system-based game initially so that it can be installed pretty much anywhere in the state,” Barbee said.

“Second, we do random inspections of gaming products throughout the state, so we’ll get the opportunity to evaluate that product as it is installed at some point in the future and address any deficiencies that come up there.”

Barbee told commissioners that the reason control board officials feel comfortable with removing the requirement is that the board has not run into any such deficiencies in the past.

NGC chair Jennifer Togliatti sought clarification from Barbee that if there is a deficiency, the gaming licensee will still be required to report it to the control board.

“Correct,” Barbee said. “If there is a deficiency that falls outside of the way the product was approved, it impacts its approval status. They have a notification requirement.”

Other regulations that received final commission approval were Regulation 23.040 which will allow licensees to utilize the casino cage in lieu of a cardroom bank without written approval, as well as amending Regulation 26.060 to update the correct tax rate of 3 percent that licensees pay on the total commission deducted on all pari-mutuel wagers.

Regulation 5.225, subsection 19, governing wagering accounts was also approved for deletion. The deletion of the regulation will change the requirement that licensees submit their wagering account rules for board approval prior to implementation.

The lengthy effort by state gaming regulators to amend or eliminate regulations was required to comply with a directive issued by Republican Governor Joe Lombardo.

Upon taking office in January, Lombardo tasked all state agencies to review existing regulations and recommend at least ten for removal by May 1.

The five-member commission signed off on the NGCB’s initial recommendations to eliminate 16 regulations, which were submitted to the governor’s office in late April.

After the recommendations were initially submitted to the governor’s office, under state law, both the control board and gaming commission were required to hold follow-up meetings to officially repeal the regulations.

Lombardo signed an executive order on June 30 that lifted the freeze on the regulatory process, allowing the control board and commission to move forward with removing the outdated regulations.

The governor’s decision to lift the freeze on new regulations also allows the NGC to next month consider final approval to several regulatory changes next, making it easier for sportsbooks to accept wagers on esports competitions.

The control board unanimously voted on January 11 to recommend approval of the regulatory amendments that would permit sportsbooks to decide whether to accept wagers on esports events instead of seeking board approval for each specific event in advance.

If approved by the commission on October 19, the regulations would take effect immediately.

Sportsbooks have been allowed to accept wagers on esports since 2016, but esports contests were so-called “other” events that required event-specific regulatory approval. Among the approvals given for esports betting to date have been for esports competitions such as CS:GO, ESL Pro League Season 11 and even eNASCAR events.

The regulations are amendments to Regulation 22, which outlines the rules for traditional sports betting in the state.

The amended regulations would also make sportsbook managers responsible for monitoring and reporting betting irregularities to the control board.  In addition, the regulations will prohibit players, coaches and agents of esports teams from placing bets, and sportsbooks will be required to monitor for potential match-fixing.

Sportsbook operators will also be required to notify the control board on a quarterly basis of the operators for events on which they post odds and accept wagers.

The regulatory reforms approved by the NGC on Thursday are part of a broader initiative to consider ways of streamlining gaming oversight in Nevada.

The NGCB last month approved changes to the field test process for new gaming devices, and has scheduled a second workshop on September 27 to evaluate the state's gaming technology approval process and advanced technologies such as artificial intelligence.

The board will also host a further workshop on October 5 to discuss its licensing investigation standards and processes, including "processes that could result in more effective investigations," according to a notice published on Thursday.

Additional reporting by James Kilsby.

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