Nevada lawmakers hear bill to open sports betting to ‘investors’

CARSON CITY — A bill that would allow investors to join business entities and share the profits and losses from huge wagers at Nevada sports books was heard Tuesday by a Senate committee.

Senate Bill 443 would authorize the formation of business entities to place race and sports pool wagers. Supporters of the measure say it would open up sports betting to a wider audience and increase the amount of wagering in Nevada, which holds a monopoly on sports wagers under federal law.

“We believe that there is a market demand for skilled bettors to utilize the various forms of Nevada’s entities, have individuals invest in the entity and then share the success of the wagering activity,” Quinton Singleton, vice president and deputy general counsel for CG Technology, testified before the Senate Judiciary Committee.

Under existing law, it is illegal for someone to place a bet for someone else and receive compensation for it, something called “messenger betting.” Only individuals and partnerships can place sports wagers in Nevada.

Bruce Leslie, a gambling attorney, called SB443 “an evolutionary step” in expanding sports wagering in Nevada.

Mark Clayton, outside counsel for CG Technology and former Nevada Gaming Control Board member, also testified in favor of the bill.

The original bill would have required entities to pay an initial $1,000 registration fee, $500 for annual renewals, and submit detailed personal information on each owner, director, officer, manager and investors to the Gaming Control Board.

Proponents of the bill said Tuesday they’ve been working with state gambling regulators on amendments to instead require the entity itself to disclose that information with licensed sports books. It would then be up to the establishment whether to accept wagers from a particular group and the Gaming Control Board would retain investigative and enforcement powers.

A.G. Burnett, chairman of the Gaming Control Board, was neutral on the bill and acknowledged his agency is working with supporters on amendments.

No action was taken by the committee chaired by state Sen. Greg Brower, who unsuccessfully sponsored a similar bill in 2013.

After the hearing, Singleton and Leslie said the goal is to allow entities that would operate similar to a mutual fund. Investors would invest money with the wagering firm, but they could not dictate the kinds of bets placed with their money. That would be left to a fund manager.

“It could attract honest money,” Leslie said.

A 1992 federal law confines sports wagering to four states, but none compete with Nevada and the allure of Las Vegas. The others are Delaware, Oregon and Montana, though New Jersey has been fighting in the courts and Congress, so far unsuccessfully, to join the sports betting arena.

Nevada books currently see a “handle” — or betting action — of roughly $3.5 billion in sports betting annually. Some experts estimate that could triple over five years if the bill becomes law.

Contact Sandra Chereb at schereb@reviewjournal.com or 775-687-3901. Find her on Twitter: @SandraChereb.