POSTED: 1:29 p.m. HST, Apr 8, 2013
LAST UPDATED: 1:32 p.m. HST, Apr 8, 2013
CARSON CITY, Nev. >> Private investment groups could place sports wagers on behalf of investors under a proposed law in Nevada that would allow the state to reap millions of dollars in untapped revenue.
The bill received its first hearing in a Senate committee Monday as a leading gambling executive projected that Nevada sports books could see action nearly triple in the next five years if it were to become law.
"The idea, frankly, is just to allow a group of bettors to bet as an entity," said Sen. Greg Brower, R-Reno, sponsor of the bill.
Under existing law, only individuals can place wagers at Nevada sports books.
The bill would add "entities" to be formed and authorized to make sports bets. The groups could act as a type of hedge fund and wager big dollars on football, basketball, baseball and other sports. In turn, they could seek out investors to put up money and "leave it up to the expert to make the bet," Brower said.
"This is an enormous untapped market," said Randy Sayre, a former member of the Nevada Gaming Control Board who spoke in favor of the bill.
Brower said he didn't believe allowing large, pooled bets would swing the odds or point spreads in either direction any more than what occurs now when a team is heavily favored.
Lawmakers and gambling industry officials who testified did not provide many specifics about how the new system would work.
If the bill is approved, it would be up to Nevada gambling regulators to adopt regulations. Under the bill, everyone who participates in a betting entity — from partners and shareholders to investors and customers — would have to be reported to regulators. And the groups would have to be located and operate in Nevada.
Legislators and gambling regulators did raise questions about how the state would police the entities, including whether they could become corrupted by money laundering.
Sayre believes technology allows regulators to closely monitor the organizations.
But AG Burnett, current chairman of the Gaming Control Board, said he's concerned about protecting the state's main industry from being tainted. "I'm not sure how we'd go about regulating that," he said of the idea.
Nevada holds a monopoly on sports wagering under a 1992 federal law. New Jersey voters passed a sports betting referendum in 2011, and last year that state's Legislature passed a law restricting sports bets to Atlantic City casinos and horse racing tracks. But a federal judge in February upheld the 1992 law, leaving New Jersey's efforts in doubt. Gov. Chris Christie has said he's prepared to take the state to the U.S. Supreme Court.
Supporters of the Nevada bill also said the measure would help the state capture some of the estimated $380 billion bet illegally on sports each year in the U.S.
Nevada books currently see a "handle" — or betting action — of $3.5 billion on sports wagering, Lee Amaitis of Cantor Gaming told the committee. He projected that would grow to $10 billion within five years if entity wagers are allowed. Tax revenue to the state would more than double to roughly $25 million over that time, he said.
No action on the bill was taken on SB346.