Last week, reports surfaced that Glenn Straub’s Revel casino resuscitation project could offer an esports lounge, one of the first of its kind at a New Jersey casino.
Just as Seth Schorr’s Downtown Grand in Las Vegas has formally applied to the Nevada Gaming Control Board to offer wagering at its esports lounge, a natural extension of any esports activity at the Revel would be allowing for some form of esports wagering.
That could take the form of esports tournaments, head-to-head player wagering, esports slot machines, audience-based sportsbook-style wagering, as well as other forms.
ESBR spoke with the New Jersey Division of Gaming Enforcement to get a better understanding of what types of esports wagering would be allowed under current regulations, and how they are regulated.
Esports tournaments likely a starting point
State regulators consider esports to constitute a contest where the outcome is largely based on participants’ skill.
Regulations stipulate that it is already lawful for New Jersey casinos to offer these types of “skill-based” esports tournaments, where players pay an entry fee and can win a prize.
“A casino licensee may conduct a gaming tournament for any game approved by the Division pursuant to N.J.S.A. 5:12-5.” 13:69F-8.6 (a)
“Gaming tournaments involving games where the outcome depends on the skill of the participant are authorized provided that some element of chance is also part of the game.” 13:69F-8.6 (d)
Casinos must notify the NJDGE that they wish to offer a tournament at least five days in advance, and provide a detailed list of equipment used, the number of participants and even a description of security and surveillance measures that will be used to monitor the events.
Additional temporary regulations were adopted in February that clarify requirements for those establishments wishing to offer skill-based gaming.
No casinos have yet notified the NJDGE of their intent to offer such tournaments, regulators told ESBR.
According the NJDGE attorney Chuck Kimmel, esports lounge operators also appear free to offer two-person wagering on esports slot machines.
“If you wanted to have two machines side by side where you were each playing against each other and taking a rake, we have temporarily adopted regs that would allow that as well,” Kimmel said.
“So if you want a racing game or a shooting game and wanted to just install them on the casino floor, and two people come up and play together and each put $10 dollars and the winner gets $18 and the casino takes $2, we could do that right now if anybody wanted to submit it to our slot lab to test.”
NJDGE spokeswoman Kerry Langan confirmed that head-to-head wagering by two players sitting down at a gaming console, such as a PS4 or an XBox One, would not be allowed at this time, because consoles do not meet several requirements to be considered slot machines.
No regulations for sportsbook-style wagering
It gets more complicated for New Jersey casinos that want to offer sportsbook-style wagering on esports that would be open to spectators. According to regulators, that type of wagering would:
- Need to be characterized as an event
- Need to be separately regulated and authorized by NJDGE
- Require an additional application and notification process from casinos
If audience wagering was authorized, regulators said, it would trigger event-based wagering in general, opening up the betting market for casinos to make book on any events from elections to award shows. Wagerers would still need to be at least 21 years of age to participate. The NJDGE has considered the necessary steps to authorize audience wagering, regulators said, but has not moved forward with them.
That said, Kimmel stressed that the state doesn’t believe the Professional and Amateur Sports Protection Act had esports in mind when it prohibited the authorization of sports betting, and that if the state did authorize wagering on competitive video games it would not violate PASPA.
New Jersey is currently under an injunction and cannot authorize sports wagering. It is entering the eighth year of a court battle in which it is attempting to repeal its state prohibitions on single-game sports betting. A ruling in the case from the Third Circuit Court of Appeals is expected this summer.
A clearer path in Nevada
The environment surrounding esports wagering in Nevada is clearer than in New Jersey. Since sports wagering is legal in the Silver State, wagering on esports is already allowed by licensed sportsbook operators without the need for any regulatory amendment or creation.
As it stands, if a book wants to offer esports wagering it still needs to undergo the formality of petitioning the Nevada Gaming Commission Board to allow it. ESBR has learned that the commission’s policy committee is currently formulating a plan to explicitly allow esports wagering in the future, eliminating a need for the petition process.
It remains to be seen if Nevada will classify wagering on esports as sports wagering or event wagering as part of those deliberations. The U.S. State Department has classified esports players as professional athletes for visa purposes.