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October 19, 2018

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Regulators mull ways to expand esports betting

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John Locher / AP

Teams compete during the Dreamhack Masters e-sports tournament Feb. 17 at the MGM Grand Garden Arena.

Nevada’s Gaming Control Board will soon begin allowing sports books to offer bets on a year’s worth of esports events, the board’s chief of enforcement Karl Bennison said Thursday at a gambling and esports conference at the Westgate.

Currently, books can only get permission to offer bets on one event at a time. Under the new procedure, the books would be able to ask for permission to offer bets on a series of events, possibly a year’s worth, if the events are hosted by the same company.

The change could mean more esports betting in Nevada and reflects a growing comfort Nevada’s regulators have with the industry. There have only been three events listed in books since the board began approving them last year.

“To streamline the process we are looking at approving a whole series of events if they are offered by a particular company,” Bennison said. “As long as we are comfortable with that company, the licensee won’t have to apply for each event separately — they can apply for them all at same time.”

Bennison was a member of a legal panel discussion at the Casino Esport Conference. He didn’t mention a timeline for the change, and he said there has been no formal announcement.

Currently, esports betting is covered under gaming regulation 22.120 which governs wagering on “events other than a horse race, greyhound race or athletic event.” Because of the wording of the regulation, gaming regulators and industry insiders tend to refer to these as “other events.”

Similar “other events” approved by the board include betting on who will win NBA Rookie of the Year, the World Series of Poker or the Cy Young Award.

The board began allowing esports bets under that regulation shortly after getting the OK from Nevada Gaming Policy Committee last fall.

The committee meets (when called by the governor) to examine gaming issues and make recommendations to the Nevada Gaming Control Board and the Nevada Gaming Commission, the third arm of Nevada’s gaming regulatory structure.

Regulation 22.120 forces books to ask for permission each time they want to offer bets on something considered to be an “other event.” Conversely, a licensed sports book can offer bets any time it chooses on sports not covered by the regulation.

Bennison said the concept of approving multiple events offered by one trusted event host arose during the second of a series of meetings held to address the intersection of the gambling and esports worlds.

“I was part of a breakout group, and we were asked to review the process to see what could be done to make it smoother,” he said.

He took the idea back to his colleagues at the Gaming Control Board. A representative from the Nevada Attorney General’s Office was tasked with supporting the board, and everyone was comfortable with the idea, Bennison said.

Eventually, he said, esports betting could be allowed in the same way betting is offered on NASCAR races, or athletic events such as NFL and NBA games.

The board must have a level of comfort with the organizations behind the competitions, he said. As it stands now, Bennison said, the esports industry is too fractured.

Bennison spoke about the concept is response to an audience member who asked how the board might approach regulating the technology behind esports. Game publishers are very protective of their software.

For sports that depend to some degree on technology, such as NASCAR, Nevada’s regulators don’t need to examine the car engines or other racing technology because they trust the NASCAR organization, he said. It could work the same way, he said, for esports.

After the panel discussion ended, Bennison said esports betting could be moved out of the “other event” category if esports had a trusted governing body similar to NASCAR. “ESIC is a good example,” he said.

Representatives of ESIC (the Esports Integrity Coalition) were at Thursday’s conference and at the meetings where Bennison and others came up with the new esports “other events” regulatory process.

“Not everyone is a part of ESIC,” he said. “But at some point, say if you have something like ESIC oversight, it could be that you’re good to go (to offer regular bets). Now, that hasn’t happened yet. But it could be one way.”

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