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Industry experts and executives are confident that esports will gradually become a bigger part of Nevada's sports-betting market after a pending regulatory change to facilitate esports wagering was approved by gaming officials.
To create that sustainable betting market, the Nevada Esports Technical Advisory Committee recently advanced proposed regulatory amendments that would allow retail and mobile wagering in the state to take bets on esports competitions without seeking prior approval.
That simple change is expected to increase interest in esports but not create an immediate financial benefit to state coffers, according to analysts and an industry executive.
“I don’t expect an immediate windfall with regard to esports betting demand,” said Brett Abarbanel, a member of the esports committee and director of research of the University of Nevada, Las Vegas International Gaming Institute.
“But this is a normal thing,” Abarbanel told VIXIO GamblingCompliance. “Esports is big, but still a nascent and growing space, to be sure. As more [sports]books take advantage of this more optimal set up for wagering on esports, I think we’ll see some immediate interest and steady growth as this becomes a more familiar betting market.”
When asked what it will take for the wagering handle on esports to increase, Abarbanel said it would require, at a “base level, time and energy.”
“And a welcoming community of interested bettors, books, and the esports industry itself contributing toward healthy growth of esports and related betting industries,” Abarbanel said.
Brendan Bussmann, managing partner of Las Vegas-based consultancy B Global, said wagering is already occurring on esports.
“The question becomes that in a regulated environment, how big can it become as its popularity grows,” Bussmann said. “[Las Vegas has] a host of venues today and for tomorrow that can host esports events at various levels of interest.”
“While it is still in its infancy, there is opportunity to see this sport grow on the magnitude of others.”
The next stage for esports betting regulation in Nevada is for the committee’s proposal to be approved by both the Nevada Gaming Control Board (NGCB) and the Nevada Gaming Commission (NGC).
As of Tuesday (November 8), the NGCB had yet to schedule a date for a workshop on the regulation, and no comments had been submitted to the control board.
If both regulatory bodies approve the proposed regulatory amendments, wagering on esports competitions in Nevada and worldwide would be more widely accepted by sportsbooks.
Sportsbooks have been allowed to accept wagers on esports since 2016, but esports contests were considered to be 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 Por League Season 11 and even eNASCAR events.
The only wagers approved by the NGCB were head to head, match winner and overall winner of a tournament.
The Downtown Grand Hotel & Casino in Las Vegas became the first licensee to receive permission to take wagers on esports on November 17, 2016. William Hill partnered with the casino in seeking permission to take bets on League of Legends matches during an event in Oakland, California.
“Esports wagering generally is pretty small in Nevada,” said Joe Asher, former William Hill US CEO and now president of sports betting at IGT.
“It gets more press attention than betting attention,” Asher said. “But it may increase over time as esports' popularity continues to grow. Esports as a spectator business obviously is hugely successful, but that has not translated to betting interest — yet.”
Bussmann said he believes that esports betting's best days are somewhere down the road, but “we need to lay the regulatory foundation today.”
“This is about the long-term play and not just the short-term boost,” he said. “Once approved, it is now about attracting the various stakeholders to the market and providing them a platform from which to compete.”
In terms of the most immediate next step in regulating esports in Nevada, Abarbanel told VIXIO that “we’re waiting on the NGCB to confer on what they want to come next.”
“The review of Reg 22 was the first major point of discussion, and a major component of the formation of the committee from the beginning,” she said. “I have my own personal preferences for the committee’s next to-dos, though, which I am happy to name.”
Abarbanel believes peer-to-peer gaming products (or head-to-head, as described in gambling regulations) are a very natural next step for the technical advisory committee to take up.
“There are also many opportunities for discussion on problem and responsible gambling. One of the things that came up in our earlier meetings was the opportunity for in-play wagering in esports, particularly given its all- or nearly all-virtual existence and speed of play.”
From research, Abarbanel said, “we know that in-play wagering is associated with higher rates of problem gambling, so this is an area where Nevada can really take the lead on ensuring consumer protection measures are built into innovation.”
