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Nevada public comments on interstate compacts; entities to place sports bets?

TAGs: interstate compact, Nevada, sports betting

nevada-interstate-compact-commentsNevada gaming regulators have published the first batch of public comments on the state’s proposal to enter into interstate compacts for online gambling. The comments (viewable here) range from player-centric concerns over fund segregation and dispute resolution to harebrained ‘Nevada über alles’ worldviews that suggest directing all tax revenue generated by interstate online poker into Nevada state coffers, regardless of where the player might reside.

A detailed submission by Automated Revenue Collection Systems CEO Greg Mullally focuses on the thorny issue of integrating tribal online gambling operations into the interstate system. Mullally suggests that tribes – which don’t pay state taxes on gaming revenues – could become meccas for cost-conscious online gambling operators. Mullally’s solution would be to let operators tax players directly and remit the proceeds to the state in which the player resides.

There is also a submission by the Alderney Gambling Control Commission (AGCC) that urges Nevada to reinstate legislative provisions allowing for compacting with jurisdictions beyond US borders. The AGCC says it understands “there may have been political reasons” for the deletion of these provisions from the legislation’s final text, but the AGCC “remains interested in participating in this process” and feels both Alderney and Nevada would benefit from such a system.

NEVADA PROPOSES ALLOWING CORPORATIONS TO PLACE SPORTS WAGERS
On Monday, a Nevada state senate committee held its first hearing on Sen. Greg Brower’s proposal to allow private investment groups to place sports wagers with the state’s sportsbooks. The proposed SB346 legislation expands the definition of an acceptable Nevada sportsbook ‘patron’ to include “an entity which is validly formed and existing under the laws of this State for the limited purpose of placing wagers through an account wagering system, provided that all members, partners, shareholders, investors and customers of the entity are reported to the Board.”

The legislation opens up the possibility of hedge fund-type groups placing large wagers on behalf of investors, betting syndicates and the like. Former Nevada Gaming Control Board (GCB) member Randy Sayre told the Senate committee that such entities represented “an enormous untapped market.” Sayre believes SB346 could triple Nevada sportsbook action in five years, but current GCB chairman A.G. Burnett expressed reservations, saying he wasn’t sure how regulators could police such a system to avoid possible money laundering. Despite the fact that the groups that would be expected to utilize such a system would undoubtedly represent ‘sharp’ action, Brower claims the influx of money wouldn’t have a dramatic impact on betting lines.

The regulations necessary to make SB346 a reality have yet to be written, but it would be interesting to see how they would prevent out-of-state residents from establishing Nevada-based shell companies from which to place their wagers. It will also be very interesting to see if the major pro and college sports leagues react to this expansion of sports betting with the same level of vitriol that they’ve directed towards New Jersey’s attempt to offer its residents the option of legally wagering on sports.

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