How Aggressively Will Las Vegas Embrace Esports Betting? It Depends On Whether Or Not It’s A Sport

Written By Joss Wood on May 16, 2016 - Last Updated on January 22, 2018

[toc]The Gaming Policy Committee meeting designed to bring Nevada regulators, policymakers, and gambling industry stakeholders up to speed on esports appears to have accomplished that goal – and possibly set the stage for a key regulatory shift that could speed Las Vegas’ embrace of betting on esports matches.

The meeting was chaired by Nevada Governor Brian Sandoval, who, like other committee members, expressed his lack of knowledge about esports.

By the end of the meeting, he was much better informed, and more to the point, both reassured by what he heard and excited by the positive potential of esports to contribute to Nevada.

There were several key moments in the meeting which helped the committee understand the esports industry and how the NGCB and NGC could take action to regulate esports betting.

If esports are a sport, existing regulation will suffice

During questions on the testimony of Seth Schorr, CEO of Fifth Street Gaming, the committee raised the issue of Regulation 22.

Schorr revealed that the sports book representing The Downtown Grand has applied for permission to accept wagers on a forthcoming esports event under a regulatory exemption (22.120(f)) that allows for wagering on non-sporting events (such as the winner of the Heisman Trophy).

NGCB Chairman A.G. Burnett explained that under the existing provisions of Regulation 22, esports could be categorized as an athletic sports event (on which betting is permitted by default, meaning no application would be required to offer lines for an esports match) as an administrative decision.

Burnett returned to the issues in questions on the testimony of Arthur N. Manteris, vice president of race and sports operations for Station Casinos.

Governor Sandoval was enthusiastic about not having to take the issue through the legislature, if – and only if – the NGC and NGCB could satisfy themselves that esports legitimately qualifies as a “sport.”

The governor recommended that the matter be considered so that the October committee meeting could be in a position to take a decision on the issue.

One aspect that may make their deliberations more complicated is the fact that esports are analogous to sports, not to one sport. The committee may have to consider each regulated esport specifically – for example CS:GO, Call of Duty, StarCraft – rather than being able to create a blanket category.

Viewing figures lead to betting demand

Arthur Manteris also made a strong impression. He is an old-school bookmaker, experienced at adapting to new technology and new forms of betting.

He said that he was staggered by the size of the viewing figures for esports competitions. He made the point that in his experience, popularity presaged interest in betting.

“Gamblers make viewers, and viewers make gamblers,” Manteris told the committee, referring to the feedback between betting and sports viewing.

Manteris added that the viewing figures are: “Numbers the world has never seen before.”

Following his testimony, Chairman Alamo commented: “We should make this a priority. Good for sportsbooks, good for bricks and mortar, good for Nevada.”

Anti-fraud and match fixing countermeasures are developing rapidly

CEO of ESL Craig Levine also talked about the enormous numbers the esports industry is attracting. The 10th Intel Extreme Masters event in Poland at the beginning of March attracted 113,000 supporters with another 36 million watching online.

Levine described the core esports audience as millennial males and said that esports were the “passion point” for the “digital generation.”

When questioned about the potential for fraud and match fixing, Levine explained the relationship that ESL had built with Sportradar. The Sportradar anti-fraud package tracks betting patterns which can indicate where match fixing might take place.

Levine also highlighted the new Esports Integrity Coalition, established by ESL as a body open to all the industry. The sports lawyer Ian Smith is leading the coalition’s formation and aims to establish a code of practice at the earliest opportunity.

In response to committee concerns that esports has no single governing body, such as those governing tennis, football or basketball, Levine was able to point to the new World Esports Association (WESA).

WESA was announced in London on May 13 and aims to give esports a FIFA equivalent governing body.

Big live esports competitions are easier to control

Following testimony from Seth Schorr of Fifth Street Gaming, and other witnesses, including Fatal1ty, the committee’s comments suggested that it accepted the idea that large, live esports competitions could provide a starting point for esports betting.

Allowing betting on the largest esports competitions could be an “achievable goal,” and provide a basis for controlling the risks which arise when the “wagering dollars exceed the prize money.”

Fatal1ty challenged and changed pre-conceived ideas about esports

Johnathan “Fatal1ty” Wendel is one of esports’ icons. His description of what a top professional gamer has to do in order to get to and stay at the top of the profession made a strong impression on the committee.

Wendel’s explanation of the requirements for physical and mental alertness opened the eyes of the committee to the athletic nature of esports. He explained how he needed to be fit and healthy so that his reaction times would be minimized. He even stayed away from caffeine to reduce the risk of the mental highs and lows that might result in reduced performance.

Governor Sandoval and NGC Chairman Tony Alamo both commented on how Wendel was not what they expected. They were both impressed with the quality of the young man giving evidence, and with what he said.

Nevada has an opportunity for leadership

When Chris Grove, senior partner at Narus Advisors and founder of Esports Betting Report, showed the committee various maps of the progress of online gambling and daily fantasy sports (DFS) legislation in the U.S., the committee understood the potential for Nevada to take a national and even global lead in esports betting regulation.

None of Grove’s maps showed any other state preparing for esports regulation or legislation. Several of the other witnesses reinforced the point that esports was an opportunity for the Nevada regulators to lead the industry.

In his summary of the meeting, Governor Sandoval impressed on the committee his sense of cautious urgency. He told the committee to consider the issues raised and be prepared to make decisions at the October meeting.

“Measure twice and cut once,” said Sandoval, but added that that did not mean “paralysis by analysis.”

There is a very real prospect that Nevada will formally propose a regulatory basis for esports betting this year.

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Joss Wood

Joss Wood holds an English degree from the University of Birmingham and also earned a master’s degree in organizational development from the University of Manchester. Joss has a special focus on the international online gambling market, though he also writes extensively on US regulated markets, sports betting, and esports betting.

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