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Nevada group Betting Proposal Issues

Nevada Gaming Control Board chief has some reservations.
Nevada bill SB346, which proposes allowing private equity companies to place large 'group' or 'equity' bets on sports events through Nevada bookiesmay have sailed through the state Senate, but it could face a more difficult passage through the House.
Nevada Gaming Control Board chief AG Burnett gave his rather negative opinion to the state House of Assembly Judiciary Committee Friday, commenting that the bill presents serious regulatory concerns over how the state would police activities to protect the reputation of Nevada's core multi-billion gambling industry and guard against money laundering, corruption and fraud.
"If there is a scandal or a fund manager closes the book and runs off to the Cayman Islands ... Nevada's reputation may be on the line," Burnett warned committee members, reminding them that in terms of current Nevada law only individuals can place bets.
And as the Associated Press news agency pointed out in its report on the hearing: "It's also illegal to pay someone else to place a bet for you - something called "messenger betting."
But back to Burnett, who said the bill would essentially "gut" that law.
Sen. Greg Brower, a Republican from Reno who sponsors the bill, claims that it will enable Nevada to capture some of the estimated $380 billion bet illegally on sports each year in the U.S.
However, Burnett said the concept of entity wagering appears to be an attempt to allow hedge funds and other big investment firms to gamble on behalf of investors at Nevada sports books.
"How that complies with federal law, the Gaming Control Board is not sure," he told the committee.
Burnett has concerns regarding enforcement, too, pointing out that if all participants and every aspect of private equity wagering were based in Nevada, the regulatory task would be manageable.
But what happens when out-of-state equity bettors start making wagers through Nevada bookies, he asked? That would bring unique regulatory and legal challenges, one being whether out-of-state investors who transfer money electronically would run afoul of federal or other state laws.
Another possibility could be major investment companies creating separate entities to manage and place sports bets...and who would be subject to regulatory scrutiny to determine suitability to operate in Nevada?
Calling the bill a gamble in itself, Burnett emphasised that the NGCB does not have a problem with new ideas that can enhance the state's gambling industry...but he stressed that the approach has to be careful, legal and cautious to avoid embarrassing the state.
Referring to the bill, Burnett opined: "It's a wager that these entities will come here, will not run into trouble with the federal government ... that they will not engage in any corruption...and that they will bet lots and lots and lots of money."
The NGCB chief recommended that the US Congress pass a law, or an opinion be obtained from the federal government Department of Justice, approving the concept that money wired to Nevada sports betting firms for purposes of wagering is a legal activity...and that this should be done before going any further.
Burnett's organisation also moved to prepare for the possible passage of the bill, attaching to it a fiscal note estimating that the bill's enforcement would entail an additional budget cost of $745,000 over the next two years.
The note also contained a proposed amendment seeking authority to charge 'equity betting' firms for initial investigative costs.
The committee adjourned its hearing Friday with no action on the bill.

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