.svg)
Sports-betting operators in Nevada are a step closer to receiving final regulatory clarity over the rescission and acceptance of retail and online wagers, after gaming regulators granted initial approval to amendments to regulations overseeing the state’s bookmaking business.
The Nevada Gaming Control Board (NGCB) on Wednesday (August 7) voted unanimously to approve amendments to Regulation 22 and Regulation 16. These amendments will be finalized upon adoption by the Nevada Gaming Commission (NGC).
John Michela, senior deputy attorney general with the Nevada Attorney General’s Office, said the proposed amendments to Regulation 22.060 and 22.115 were first discussed during a control board workshop in May but were returned to staff at a meeting in July for further discussion out of concern that the enforcement division could be inundated with requests for changes to sportsbook operators' House Rules.
“The main purpose of the draft before you today is to require reporting when a book accepts an ostensible wager on an event whose outcome has already been determined and to clarify when approval from the board chair is necessary to rescind a wager,” said Michela.
Michela said both of the proposed changes were submitted for approval after discussions with gaming licensees.
The amendment to Regulation 22.060 (3) would require immediate reporting of wagers accepted after the outcome of an event. The difference between the current draft dated July 16 and the workshop draft is that although immediate reporting is still required, licensees have 45 days to provide a supplemental report with all the details.
The report needs to include details of the causes of the incident, as well as corrective measures and actions taken by the licensee with respect to payout. According to the proposed amendment, the NGCB chair may require a licensee to provide additional information about any incident.
The change to Regulation 22.115 clarifies that sportsbooks do not need NGCB chair approval to recognize that a wager has been void if the wager has been placed after the outcome of an event has already been determined.
Michela said drafts that were before the control board in May and July would have allowed recession without chair approval only if a sportsbook operator’s House Rules provide for rescission in certain circumstances. In Nevada, the enforcement division reviews House Rules, and they must be approved by the control board chair.
“Based on this, the enforcement division was concerned that it would be inundated with new and novel House Rules proposals allowing recission without board chair approval under a myriad of circumstances,” Michela said.
To address this potential issue, Michela said, the proposed changes to Regulation 22.115 have been limited to specify that board chair approval is not required to recognize that a wager placed after the outcome of an event has been determined to be void.
“All other incidents where a book would like a wager rescinded would remain unchanged,” Michela said. “The book would have to request board chair approval.”
NGCB chair Kirk Hendrick supported the changes, noting that the goal for the board was to be fair to both the patron and the licensees.
“One of the things about being fair is that we don’t saddle licensees with past-postings,” Hendrick said.
“The world has changed a lot since that regulation was put in place. Somebody in the day it was passed would have to walk up to a counter, they would place a bet, be handed a piece of paper and generally go back to the same book a day or two (maybe) three weeks later … and would have to deal with that same ticket writer and with the same book.”
Hendrick said if a patron knowingly or unknowingly made a past-post they would have a relationship with that sportsbook where maybe they would admit to making a mistake and take care of the issue. He added that in today’s digital age if a past-posting happened there is no personal relationship between the bettor and the sportsbook.
Hendrick said the change makes the control board’s position “very clear”.
The three-member control board also approved draft amendments dated June 7 to Regulation 16 that match up the definition of prescribed activity with the statutory definition and change the requirements for beneficial owners of voting securities of registered publicly traded companies (PTCs).
Michael Somps, senior deputy attorney general with the Nevada attorney general’s office, explained the changes to the beneficial ownership requirements were to comply with the legislature's NRS 463.643, which allows the NGC to adopt regulations setting how things must occur.
The first change to Regulation 16.405(3) requires any person who owns more than 5 percent of the voting securities of a gaming licensee and reports that ownership to the U.S. Securities and Exchange Commission (SEC) must within ten days of filing with the SEC notify the commission that the report has been filed.
The control board on Wednesday also approved new language to Regulation 16.405(4) that any person who owns more than 10 percent of the voting securities of a PTC is going to be required to apply to the commission for a finding of suitability or they are going to have to divest to below 10 percent within 30 days.
“We also added some language, sort of a safety valve, that allows the board chair to extend these time periods,” Somps said.
