From the Changing Vegas Blog

ESports Legislative Update: It’s the Wild, Wild West!

An ESports Legislation Guide: U.S. Western States

NEVADA

Ever since gambling was legalized in Las Vegas back in 1931, the City has led the world in gambling innovations. The City’s evolution took another step on August 18, 2021 as the Nevada Control Board officially established an ESports Technical Advisory Committee to develop ESports betting standards for the state.

When looking at legalizing ESports, there are three main considerations. The first is whether casinos and licensed gaming entities can hold ESports tournaments and events on premise, and the second is whether a sportsbook can take bets on esports events, and the third is whether ESports betting websites and mobile apps are allowed to be played in the state.

Currently, Nevada is the only state in the West to allow all three, though so far, each ESports event that a casino sportsbook wishes to take bets on must be vetted and approved beforehand by the Gaming Control Board.

For example, in 2020, the Nevada Gaming Control Board approved betting on Season 11 of the Counter-Strike ESL Pro League at all of the state’s sportsbooks. The approved wagers included head-to-head, winner of each match, and overall season winner. No in-play betting was allowed.

Background

Ben Kieckhefer

In March 2021, as a way to boost the economy after the lockdown, Nevada State Senator Ben Kieckhefer introduced S.B. 165

to create the Nevada Esports Commission to “regulate Esports; prescribing the membership and terms of office of members of the Commission; providing for the appointment of the Executive Director of the Commission; authorizing the Commission to adopt regulations; and providing other matters properly relating” to ESports.

The new regulatory Commission was to be housed under the Nevada Department of Business and Industry and operate much like the Nevada Athletic Commission. In the bill, the term “Esports” was defined as any “contest of multiple players using video games,” whether it’s played online or played in person.

This initial bill received so much pushback from game developers that it was watered down significantly before being signed by Governor Steve Sisloak on June 8, 2021. The Entertainment Software Association (“ESA”) which represents the interests of the video game industry was the main opponent of the bill, along with a number of ESports tournament organizers. The ESA, of course, was not against the growth of the ESports industry in Nevada, but rather the possible establishment of yet another regulatory body.

Going Forward

After meeting last month, the Nevada Control Board will now appoint industry professionals to the ESports Technical Advisory Committee. It’s the Committee’s job to make recommendations to the Board on how ESports betting will work in Nevada, with an eye toward ensuring the integrity of all matches.

Seth Schoor

This is a clear step forward and the framework being developed in Nevada is sure to be emulated by other U.S. states as they approach legalizing ESports betting. Seth Schoor of The Downtown Grand is one of the leaders making things happen.

Yet, just as this new advance is taking place in Nevada, a counter move is afoot. The CEOs of 26 gaming companies – most of them Off-Strip, rural, and Northern Nevada casinos – have sent a copy of a letter dated July 28th to the Nevada Gaming Control Board opposing the expansion of online gaming in the state.

These properties include: The Plaza, the D, Circa, South Point, Red Rock, El Cortez, Golden Gate, the Sahara, the Monarch Casino, and others. They’re claiming that expanding online gaming will siphon business from their brick-and-mortar casinos. How this affects ESports is unclear other than the obvious: Many ESports tournaments and ESports betting occurs online.

The absence of MGM Resorts International and Caesars Entertainment within the group is noteworthy, as both corporations operate successful online betting apps, and have spent millions promoting them.

HyperX Esports Arena at the Luxor

The HyperX Esports Arena at the Luxor and the Mandalay Bay Convention Center, both at MGM properties, are the two largest ESports venues in Las Vegas. And, just last week, one of MGM’s partners, Entain (formerly GVC Holdings) bought Unikorn, a profitable esports-only betting platform. (Entain and MGM Resorts International jointly own BetMGM.)

It’s been rumoured that MGM is still looking to buy Entain, which plans to spend $69 million to grow their ESports business over the next year.

The ESports stakes are certainly high in Nevada. We’ll be watching closely, as it will be interesting to see how this all pans out, and whether Las Vegas can achieve its goal of becoming the ESports Capital of the World.

COLORADO

On May 1, 2020, legal sports betting officially opened in Colorado, including ESports.

In December 2020, the Sky Ute Casino in Ignacio, Colorado also launched the first online and mobile sportsbook solely dedicated to ESports. The Southern Ute tribe partnered with GameCo and USBookmaking to create the Sky Ute Sportsbook, which is only available to Colorado residents. Other online ESports betting sites, like DraftKings, are also legal in the state.

Colorado is off to a great start and their collegiate ESports community is flourishing. For example, the US Air Force and Space Force gaming program now boasts more than 15,000 members, including veterans, dependents, Guard and Reserve members, and wounded warriors, who compete in various games, such as Call of Duty, League of Legends, Super Smash Bros. Ultimate, and Apex Legends.

WYOMING and ARIZONA

These two Western states just made sports betting history. Wyoming opened to online sports betting on September 1, for bettors 18 years old or older, just in time for the 2021-2022 NFL season. Under HB 133, Wyoming law will also allow cryptocurrency to be accepted by local sportsbooks as a form of payment.

Just one week later, on September 9th, sports betting in Arizona went live at retail and mobile sportsbooks, a day before the NFL season begins. Betting is now legal at 20 tribal casinos, 20 land-based sports betting organizations, 10 professional gaming venues, and on 60 mobile sportsbook apps.

The Arizona Diamondbacks Chase Field, the TPC Scottsdale, and Phoenix Suns Footprint Center are all participating.

The legalization of sports betting is likely the first step in allowing ESports betting in Wyoming and Arizona, though obstacles remain. In Arizona, for example, it’s still unclear whether video games competitions will be considered “games of chance” or skill-based games.

MONTANA, OREGON and NEW MEXICO

Currently, Montana, Oregon, and New Mexico allow residents to bet on online casinos and sports betting, but have not ruled whether betting on ESports is legal.

In New Mexico, the Tamaya Nation’s Santa Ana Star Casino north of Albuquerque started taking sports bets in October 2018, based on language within their compact with the state of New Mexico.

They accept sports bets on professional and collegiate sports, but are unable to accept mobile or online sports bets. Since then, a second tribal sportsbook has opened at the Inn of the Mountain Gods Resort & Casino in Mescalero.

CALIFORNIA

In May 2021, backers of an initiative to allow online and in-person sports betting at tribal casinos, horse-racing tracks, state-licensed card rooms, and professional sports facilities collected 1.4 million signatures, qualifying for the November 2022 ballot.

The proposed constitutional amendment excludes wagering on high school and California-based college teams, and requires bettors to be age 21 or older. ESports betting is not addressed in the ballot initiative.

If and when ESports betting is allowed in the state, the economic impact will be significant. Many ESports leagues, fans, and players live in California. In addition, large California venues have hosted major ESports events, including TwitchCon at the Oakland Esports Arena and the Overwatch World Cup in San Diego.

It is legal for Californians to bet on online wagering sites which include ESports events.

WASHINGTON STATE

On March 25, 2020, Governor Jay Inslee signed House Bill 2638, which authorizes sports wagering in the state, “ subject to the terms of tribal-state gaming compacts.”

The Washington State Gambling Commission is currently negotiating agreements with 15 of Colorado’s 29 tribes to allow sports betting on premises. An official launch date has not been set.

Washington’s new sports wagering law will apply to professional sports and events only. At present, it does not include minor leagues, Olympics or international sports, in-state collegiate sports – or ESports.

IDAHO and UTAH

Neither sports betting nor Esports betting is allowed in Idaho and no bills are on the horizon.

Thanks for reading! To learn about the ESports approach Changing Vegas is taking, read our post on the subject.

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