96°F
weather icon Clear

Panelists at Las Vegas event discuss failings of esports wagering

Updated September 5, 2019 - 3:06 pm

Gambling on esports video games isn’t taking off the way industry leaders thought it would.

Why it isn’t and how industry leaders can generate enthusiasm for wagering that would attract a young demographic to the casino was addressed Wednesday in a series of panel discussions at the Casino Esports Conference.

Regulators, casino executives and international esports entrepreneurs and investors discussed the nuances of monetizing video game play on the first day of a two-day event at Luxor.

The South Strip resort is home to the HyperX Esports Arena, a 30,000-square-foot high-tech video game competition venue. The global esports industry is expected to generate $1.5 billion in revenue by 2020, but so far, it’s been slow to deliver revenue some believed would occur with gamblers betting on the outcome of video-game competitions.

Roadblocks to success

Panelists identified a number of roadblocks that have kept casinos from generating gaming revenue on esports.

“We’re really at the cusp,” said panelist Jeff Silver, a Las Vegas-based attorney with law firm Dickinson Wright. “We could go either way. We have this esports phenomenon and there’s a lot of interest from the marketing perspective, but the fact of the matter is that the casino people want to know a way to monetize this particular interest that the 19-through-35-year-old customers of the casino might have in this particular activity.”

Silver, a former Nevada Gaming Control Board member, said esports entrepreneurs aren’t particularly interested in becoming licensed to participate in the gaming that could be generated by betting on competitions.

Another problem — many of the current esports players on the world’s numerous teams are under age 21. State law prohibits them and many of their underage fans from betting on their games. In New Jersey, bets can’t be taken if a team has a participant under age 18, and Indiana has simply banned betting on any esports competition.

In Nevada, Gov. Brian Sandoval convened the Gaming Policy Committee in 2016 to study esports, leading to the approval of new regulations by the Nevada Gaming Commission. Commissioners opted to categorize esports as “other” bets in race and sportsbooks, meaning that sponsors of a competition could petition the Gaming Control Board to allow wagering on an event-by-event basis.

Former Gaming Control Board Chairwoman Becky Harris, now an academic fellow at UNLV’s Center for Gaming Regulation, said in her panel that sponsors of an event are required to provide a full description of the event and the manner in which the wagers would be placed and winning wagers would be determined, and must convince regulators that the event can be fully, safely and effectively supervised.

Three events approved

But as panelist Karl Bennison, chief of the Control Board’s Enforcement Division, pointed out, the board has only approved three events in about two years.

“We’re capable (of regulating events), but we’re not getting the requests for these, so whether the argument is that our hurdles are too high or there just isn’t the drive, the operators aren’t seeing the market out there,” Bennison said. “We’re open to the idea and we’re trying to streamline the process and hopefully, eventually, we’ll make it a sport like any other sport, but there’s a ways to go.”

Integrity is another issue.

Bennison said he regularly receives alerts from Britain’s Esports Integrity Coalition to keep a watch on unusual wagering patterns and unexpected event results to monitor potential cheating or corruption in play. When he sees them, he’s somewhat thankful that betting on esports hasn’t caught on here.

Corruption killed jai alai

Silver believes corruption is what killed jai alai wagering in Nevada after it was played at the MGM Grand (now Bally’s) in the 1970s and ’80s.

“The end result was there was corruption, there was bribery, there were all manner of things happening in that industry such that that industry is no longer in existence any more,” Silver said. “We could see the same possible events happening in the esports field, as least as far as illegal gambling is concerned.”

Panelist Brendan Bussman, a partner with Las Vegas-based Global Market Advisors, said the industry must educate lawmakers and regulators if betting on esports is to flourish. He said esports could face some of the same challenges as sports wagering because each state may have its own set of rules of how to regulate the industry.

“The industry needs to come together and figure out the rules and parameters they want to be regulated and let that lay a foundation and advocate for that,” Bussman said.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

Don't miss the big stories. Like us on Facebook.
Business Videos
North Las Vegas company prepares for Mars - VIDEO
Robert Bigelow and his Bigelow Aerospace manufacturing facility played host to eight NASA astronauts and 60 engineers this week getting to know the company’s B330 autonomous, expandable space station. (Elizabeth Brumley/Las Vegas Review-Journal)
Las Vegas developer talks about a new apartment complex called “the yoU”
Frank Marretti lll, founder of G2 Capital Development, talks about his new apartment complex called “the yoU” near UNLV. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Steel cables will hoist roof at Allegiant Stadium - VIDEO
Stainless steel cables are being put into place at Allegiant Stadium to begin the process of putting the roof on the 65,000-seat stadium in Las Vegas. Stadium Chief Operating Officer Don Webb explains how the cables will be used to get the roof put on the future home of the Raiders and UNLV football. (Heidi Fang/Las Vegas Review-Journal)
The last remaining Sigma Derby game in Las Vegas
Derek Stevens, owner of the D Las Vegas, talks about the last remaining Sigma Derby horse racing game in Las Vegas inside his casino floor. (Erik Verduzco/Las Vegas Review-Journal)
Popeyes Spicy Chicken Sandwich Review
Janine Blake of Las Vegas gives her review of the new Popeyes Spicy Chicken Sandwich at the restaurant’s location on west Bonanza Road on Thursday, Aug. 22, 2019,
SuperZoo 2019 takes over Mandalay Bay in Las Vegas
SuperZoo 2019 show for pet retailers brought pet products of all description to the Mandalay Bay Convention Center in Las Vegas. (Heidi Knapp Rinella/Las Vegas Review-Journal)
MSG Sphere at The Venetian to cost $1.2B plus
Scheduled to open in 2021, it is expected to be busier than Madison Square Garden in New York. (Michael Quine/Las Vegas Review-Journal)
Favorite products from SuperZoo 2019
Some of the fun and interesting pet products on display at the SuperZoo in Las Vegas at the Mandalay Bay Convention Center. (L.E. Baskow/Las Vegas Review-Journal)
MAGIC Convention Day 3
The fashion trade show MAGIC, held Monday through Wednesday at the Las Vegas Convention Center. (Elizabeth Brumley/Las Vegas Review-Journal)
MAGIC Las Vegas - Day One
The biannual MAGIC convention show opened Monday at the Las Vegas Convention Center. (Elizabeth Brumley/Las Vegas Review-Journal)
Allegiant celebrates naming deal with tailgate party
Allegiant Air employees celebrate with a tailgate party after the company’s naming deal with the Raiders for the new Las Vegas stadium.
Nevada's sportsbook operators welcome competition
Sportsbook operators from near and far are looking to get into in the established Nevada market, experts say. (Las Vegas Review-Journal)
Get a first look of MSG Sphere construction in Las Vegas
Representatives of The Madison Square Garden Company give the first glimpse of progress Tuesday of the under-construction MSG Sphere — a first-of-its-kind performance venue with high-tech audio and visual capabilities.
There's a new place to play board games in Las Vegas
Matt Smiciklas, co-owner of Boarding School Games, talks about the new Las Vegas business that he co-owns with Emily Labejof. Dedicated tabletop gamers can choose from more than 500 games to play for free in-store. The doors open to the public Saturday, July 20, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Renovations at the STRAT
Analysts say the $140 million renovation project at The STRAT, formerly the known as the Stratosphere, could help the hotel-casino compete with the evolving north side of the Las Vegas Strip. (Bailey Schulz/Las Vegas Review-Journal)
SLS Las Vegas will become Sahara Las Vegas
Owner Alex Meruelo announced during a special event at the SLS Las Vegas that the hotel-casino will become Sahara Las Vegas in its next iteration. Meruelo said $150 million dollars will be spent to renovate the current property. (Heidi Fang/Las Vegas Review-Journal)
Aircraft hinge maker moves to "business friendly" Nevada
Doug Silva, president of Aircraft Hinge, Inc. in Las Vegas, makes every type of hinge for every type of airplane. Silva talks about his company and why he moved it to Nevada. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Daytime fireworks mark the opening of Encore Boston Harbor
The opening of the $2.6 billion Encore Boston Harbor in Everett, Mass. included a three-minute fireworks show launched by Fireworks by Grucci Sunday, June 23, 2019. (Rick Velotta/Las Vegas Review-Journal) @RickVelotta
Elaine Wynn talks about the opening of Encore Boston Harbor
Elaine Wynn, co-founder and largest shareholder of Wynn Resorts, talked during opening festivities of the $2.6 billion Encore Boston Harbor in Everett, Mass. Sunday, June 23, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
People line hours ahead of opening for Encore Boston Harbor
Guests arrive as much as 17 hours early for the 10 a.m. opening of the $2.6 billion, 671-room resort in Everett, Mass. Sunday, June 23, 2019. (K.M. Cannon/Las Vegas Review-Journal) @reviewjournal.com
Allegiant Discusses Investments In Golf Course Software And Game Rooms - Video
Allegiant Discusses Investments In Golf Course Software And Game Rooms.
Crews working 24/7 to complete Circa downtown - VIDEO
Owner Derek Stevens goal is to open the doors to the 1.25 million-square-foot project by December 2020. (Michael Quine/Las Vegas Review-Journal)
THE LATEST
New Jersey casinos woo bettors with new sportsbooks

Now in its second year of allowing sports betting, the state has seen sports wagering surpass expectations, and Atlantic City casinos are upping their game with new sportsbooks.