A Nevada bill aims to draw more of the billions of dollars bet on sports across the nation to the state's regulated sportsbooks by letting out-of-state investors into the game.
Senate Bill 443 authorizes Nevada business entities to apply for registration for the purpose of placing bets on sports and racing. Essentially, it would allow sports betting investment funds that are registered and managed in Nevada, but also could include participants from outside the state.
The business entity must maintain an account with a bank or a financial institution located in Nevada. It also must keep original copies of records of the bets from the sportsbooks, in addition to any records required by the state's business laws. Anyone entitled to profits from the entity must be at least 21 years of age and provide personal identification, including social security number or tax identification.
"You have to give 100 percent, full transparency," said Quinton Singleton, vice president and deputy general counsel for sportsbook operator CG Technology.
Proponents stress that this isn't a green light for illegal bookmakers to set up shop in Nevada. The bill states that no one involved in the entity should be "considered to be engaged in the unlawful accepting or facilitating of any bet or wager."
"There's a lot of upkeep and a lot of responsibility on the licensees to ensure that these agents and registered entities are what they say they are," Nevada Gaming Control Board chairman A.G. Burnett told ESPN.com. "But there's nothing in this statute that forces books to do this. Books can always make their own decisions, and if they don't feel comfortable doing that and don't see the need for it, they definitely don't have to do this. The books that do choose to do it, there is going to be a lot of compliance that they have to look at, and we'll be watching. "
The bill is young and evolving. The language likely will be tweaked as it moves through the legislative process. A hearing was held Tuesday in the Senate Judiciary Committee, with no opposition. The bill will need to pass through the Senate by April 21, before heading to the Assembly.
A similar bill was introduced in 2013 and breezed through Senate before stalling in committee in the Assembly. The 2013 bill did not have the support of the Nevada Gaming Control Board. The NGC believes the current bill has potential and is actively working on it with the bill's authors.
All bets would have to be placed at Nevada sportsbooks. Proponents caution that this bill is not designed for out-of-state bettors to call in bets for their entity agent to place. That would be a violation of the Federal Wire Act, which prohibits the "transmission in interstate or foreign commerce of bets or wagers" across state lines.
"This bill isn't designed to allow people calling across state lines, saying, 'hey, place this wager for me,' if that constitutes a Wire Act violation," explained Bruce Leslie, an independent Nevada gaming attorney, who testified in support of the bill Tuesday. "This, conceptually, is more like a mutual fund."
Nevada state Sen. Greg Brower, a former U.S. attorney and the bill's sponsor, gave it a 60 percent chance of passing.
Some have questioned whether sportsbooks will continue to accept an entity's wagers, if it proves to have consistent success.
"As liquidity in the pools grows, it enables books to manage larger wagers more efficiently," Singleton said. "Books manage pricing as a function of the wagers coming in, as this bill is expected to increase the market, book risk-management practices see correlative growth and adapt to the market size."
Other sportsbook operators in Nevada are taking a wait-and-see approach. The Westgate SuperBook, William Hill and the Wynn all declined comment.
In 2014, $3.9 billion was wagered on sports at Nevada sportsbooks. Experts estimate as much as $400 billion is wagered on sports annually in the United States.