Nevada has a long history of sports wagering and became a role model for states that began legalizing sports betting after the PASPA repeal in May 2018. Not too long after, New Jersey started passing Nevada in sports betting handle and revenue, with online betting driving just under 90% of total handle.
What are the key considerations for the original U.S. gambling state in 2021 as neighboring states move toward their own regulated betting markets? What lies ahead for Nevada?
We connected with Vegas resident and gaming attorney Jennifer Gaynor to ask her about where Nevada sports betting is headed and what role the state will play now that other states start offering their own local betting alternatives.
How has the Nevada gaming landscape changed since the repeal of PASPA in 2018?
Gaynor. We are almost 3 years out for PASPA, however, in Nevada, there hasn’t been much of a visible change. If you walk into a Nevada sportsbook, they look the same as they always have.
The largest changes for Nevada-based companies are the deals that you see being reported between them and software companies, sports leagues and teams, media companies, etc. – to expand their sports betting offerings. For example, a huge change on the table as I speak is that Ceasars Entertainment is buying William Hill. It’s a big move that can help Caesars to become one of the largest players in the national sports betting picture overnight.
We’ve seen an uptick in requests for approval of esporting events in Nevada during the pandemic. Nevada could well become a key player in the emerging esports market. In part because it is a one-of-a-kind destination and in part due to our rigorous regulatory system that ensures that wagers made here are safe and fair for consumers.
What are the biggest challenges your sports clients face today?
Gaynor. One major challenge for everyone is staying on top of the ever-moving landscape. We now have, I believe, 22 states where some form of sports betting has been legalized, and about 17 more states have sports betting legislation on the table. There are a lot of players, a lot of differing regulatory schemes, and it’s all changing at a rapid pace.
Another major challenge for legal sports betting is the fight over who has the rights to data. In-play wagers will be a huge and growing sector, but such wagers require access to accurate and dependable real-time data. The sports leagues have made plays to cash in on their data, and some sports betting entities are forming partnerships with sports leagues, likely in hopes of getting the best access to such data. This is a battle that is far from over.
Some may believe that it will be detrimental to the Nevada sports betting market when nearby states, such as Arizona and California, come on board. But I don’t believe that’s the case. It’s not a zero sum game. A larger legal betting market means more potential players who will be attracted to Las Vegas as a place to enjoy watching and wagering on games and events.
Look at what happened with online poker- at the height of the poker craze Las Vegas had a real boom in its poker rooms. And look what has happened with the proliferation of casinos across the country- some feared that would cannibalize the Las Vegas market, but (pre-pandemic), Las Vegas continued to grow and thrive. A rising tide lifts all ships and I believe that holds true for an expanding sports betting market.
What do you think other states where sports betting is now becoming legal can learn from Nevada?
Gaynor. With years of experience in legal sports betting, the most important advantage that Nevada has is experience. Our bookmakers understand how to manage risk. Sports betting is unlike other gambling games, where the house has an built-in edge. The house must know how to balance its wagers and payouts to avoid having to pay more out to winners than they receive in wagers on an event.
I also believe that some states are adopting sports betting enabling legislation thinking it will be a cash cow for their state. Sports wagering has traditionally been a low-margin game, and I think states that are new to the game may want to temper their expectations as far as revenue generation is concerned. There are also benefits beyond revenue generation for states to consider- including consumer protection. Consumers are undoubtedly better off in a regulated, legal market than dealing with illegal bookmakers. In addition, the sharing of information regarding wagering patterns in the legal market can help to detect game-fixing.
Do you think we’ll ever see Federal legislation that will allow for borderless sports betting? What would that look like?
Gaynor. I know this has and will continue to come up, but I don’t believe we’ll ever have an over-arching federal scheme. Gambling has traditionally been left to the states to regulate and I don’t see that changing.
Mobile sports betting is advancing in a way that may force legislators to take a fresh look at gambling regulations, not only in Nevada but across the country. What do you think are the biggest challenges to solve for mobile and online betting operators in the next year?
Mobile and online sports betting is undoubtedly a huge growth market. The challenges include geo-location of wagers and making sure wagers are not placed from across state lines. You also have increased risk of underage gaming. And it’s harder to manage AML programs when everything is done online, including the establishment of player accounts.