Description
GAMINGLEGALNEWS
and will craft recommendations for the Control Board and Gaming
Commission. The recommendations of the Committee are not binding
on the gaming regulators but merely advisory.
The Committee’s initial meeting on March 7 served mainly as a forum
for experts in the gaming industry and leaders of the DFS movement
to share relevant research and information. Presenters included
Chairmen Alamo and Burnett, representatives of the American
Gaming Association (AGA), the Nevada Resort Association (NRA), the
Association of Gaming Equipment Manufacturers (AGEM), the CEOs
of DraftKings and FanDuel, and academic and legal gaming experts,
including Dickinson Wright attorney Greg Gemignani, who is a longtime professor in gaming law at the UNLV Boyd School of Law.
The discussion regarding skill gaming and interactive gaming included
that Nevada needs to ensure that its regulations allow for speedy
innovation to remain relevant for a younger generation that will
want to see games that incorporate social media and video-gaming
concepts. Marcus Prater of AGEM noted that he hopes that gaming
manufacturers will have hybrid games of skill and chance on Nevada’s
casino floors by early summer.
The DFS discussion, however, dominated the day, and several themes
became apparent throughout the meeting.
First, almost all agreed that DFS can be “good” – in that it has sparked clear nationwide and even worldwide interest – and that it needs to be incorporated in Nevada in some fashion to allow our gaming industry to remain competitive. Everyone at the hearing also agreed that DFS offerings must be transparent and regulated to protect both consumers and the reputation of the gaming industry. Where the consensus began to break down was in how such regulation should be structured. Several voiced concerns that Nevada’s regulations need to be adjusted to keep pace with innovation and to allow for a greater number of content providers to contribute.
Others noted that the black market for sports wagering far outpaces the legal market and put forth an argument that can be summed up as “citizens are going to find a way to wager on sports, illegally or legally, so we may as well craft regulations to protect them when they do so.” Nevada’s gaming licensees’ concerns centered on concepts of fairness. In particular, licensees want the opportunity to take part in the booming DFS industry but are concerned that even if DFS offerings were to be legalized in some form in Nevada, they could still put their gaming licenses in jeopardy by partnering with DFS companies if the DFS offerings violate federal law or the laws of other states where they are being offered. The DFS operators, while agreeing that they are open to some form of regulation, argued that what they offer is not well suited to what they termed Nevada’s “onerous” regulations for gaming licensees. They are requesting Nevada to create a “new box” for DFS offerings to be regulated. Finally, the sword of Damocles hanging overhead is the fact that there are at least two U.S. Attorneys that are investigating DFS operators for page 2 of 2 violations of federal law.
If a federal court determines that DFS offerings equal sports wagering, much like the Nevada Attorney General did several months ago, then federal laws, including the Wire Act, could make unlicensed DFS offerings illegal nationwide, despite any state regulations to the contrary. In addition, a big issue hampering Nevada from taking fast action on this issue is the fact that its Legislature meets only every second year, with the next legislative session not until February 2017. This means that, short of calling a special session, any changes to Nevada’s gaming laws to accommodate DFS-style gaming will be on hold until next year. While the Committee ponders how to deal with the offerings from companies like FanDuel and DraftKings, however, DFS is showing some signs of life in Nevada. Vic Salerno, a long-time Nevada gaming business operator, has applied to become the first Nevada-licensed gaming operator to offer DFS-style wagering with his new venture, U.S.
Fantasy (USF). Through USF, he will offer a fantasy sports product that allows players to make fantasy-type sports wagers utilizing the existing pari-mutuel system. USF will be Nevada-licensed and will operate under existing Nevada gaming statutes and regulations. The Committee determined that it will meet three more times during 2016: in May to discuss interactive and skill gaming issues, in August to focus on DFS, and then again in the fall to deliberate and craft its findings and recommendations.
These recommendations will be delivered to the Governor, the Nevada Gaming Commission, and the Nevada Gaming Control Board just in time to craft legislation for the 2017 Nevada Legislature to consider. Jennifer Gaynor, Greg Gemignani, and Kate Lowenhar-Fisher are Members in Dickinson Wright’s Las Vegas office, and Jeff Silver is Of Counsel in the Las Vegas office. Jennifer Gaynor can be reached at 702.550.4462 or jgaynor@ dickinsonwright.com. See the masthead for the contact information of the other authors. .
First, almost all agreed that DFS can be “good” – in that it has sparked clear nationwide and even worldwide interest – and that it needs to be incorporated in Nevada in some fashion to allow our gaming industry to remain competitive. Everyone at the hearing also agreed that DFS offerings must be transparent and regulated to protect both consumers and the reputation of the gaming industry. Where the consensus began to break down was in how such regulation should be structured. Several voiced concerns that Nevada’s regulations need to be adjusted to keep pace with innovation and to allow for a greater number of content providers to contribute.
Others noted that the black market for sports wagering far outpaces the legal market and put forth an argument that can be summed up as “citizens are going to find a way to wager on sports, illegally or legally, so we may as well craft regulations to protect them when they do so.” Nevada’s gaming licensees’ concerns centered on concepts of fairness. In particular, licensees want the opportunity to take part in the booming DFS industry but are concerned that even if DFS offerings were to be legalized in some form in Nevada, they could still put their gaming licenses in jeopardy by partnering with DFS companies if the DFS offerings violate federal law or the laws of other states where they are being offered. The DFS operators, while agreeing that they are open to some form of regulation, argued that what they offer is not well suited to what they termed Nevada’s “onerous” regulations for gaming licensees. They are requesting Nevada to create a “new box” for DFS offerings to be regulated. Finally, the sword of Damocles hanging overhead is the fact that there are at least two U.S. Attorneys that are investigating DFS operators for page 2 of 2 violations of federal law.
If a federal court determines that DFS offerings equal sports wagering, much like the Nevada Attorney General did several months ago, then federal laws, including the Wire Act, could make unlicensed DFS offerings illegal nationwide, despite any state regulations to the contrary. In addition, a big issue hampering Nevada from taking fast action on this issue is the fact that its Legislature meets only every second year, with the next legislative session not until February 2017. This means that, short of calling a special session, any changes to Nevada’s gaming laws to accommodate DFS-style gaming will be on hold until next year. While the Committee ponders how to deal with the offerings from companies like FanDuel and DraftKings, however, DFS is showing some signs of life in Nevada. Vic Salerno, a long-time Nevada gaming business operator, has applied to become the first Nevada-licensed gaming operator to offer DFS-style wagering with his new venture, U.S.
Fantasy (USF). Through USF, he will offer a fantasy sports product that allows players to make fantasy-type sports wagers utilizing the existing pari-mutuel system. USF will be Nevada-licensed and will operate under existing Nevada gaming statutes and regulations. The Committee determined that it will meet three more times during 2016: in May to discuss interactive and skill gaming issues, in August to focus on DFS, and then again in the fall to deliberate and craft its findings and recommendations.
These recommendations will be delivered to the Governor, the Nevada Gaming Commission, and the Nevada Gaming Control Board just in time to craft legislation for the 2017 Nevada Legislature to consider. Jennifer Gaynor, Greg Gemignani, and Kate Lowenhar-Fisher are Members in Dickinson Wright’s Las Vegas office, and Jeff Silver is Of Counsel in the Las Vegas office. Jennifer Gaynor can be reached at 702.550.4462 or jgaynor@ dickinsonwright.com. See the masthead for the contact information of the other authors. .
