Entity wagering bill would create opportunities for revenue
May 5, 2013
Since gaming was legalized in Nevada in 1931, the state has been the leader in gaming industry developments and progress. Nevada's pioneering efforts established a regulatory framework that has become known the world over as the standard for licensing, regulation and enforcement. This includes being the only state to offer large scale legal sports wagering on a full menu of sporting events.
The Nevada sports wagering "handle," or the total amount wagered, was just under $3.5 billion in 2012. The tax on that amounted to more than $10 million, helping to fund the critical services of the state. Projections show that these numbers could triple in five years if the Nevada Legislature passes Senate Bill 346, an entity wagering bill to authorize "entities" in Nevada to designate a fund manager and control money that can be wagered through sports books. These entities would be required to disclose all members, partners, shareholders, and participants to the Nevada Gaming Control Board, providing transparency and a clear, auditable record of individuals and transactions. Former Gaming Control Board Members Mark Lipparelli and Randy Sayre are both on public record in support of bringing entity wagering to Nevada.
SB 346, which passed the Senate, would attract investment funds and other financial services companies to establish bases of operation in Nevada as the only state where an expert of market data analysis can engage in both financial trading and sports betting. The formation of these new sports wagering entities will create jobs by growing the existing finance industry in addition to fostering new opportunities for finance in Nevada. Such industry expansion promises hundreds or even thousands of jobs not only in the financial sector and sports books, but indirect jobs in construction and ancillary services. After just five years of entity wagering, the states' tax revenue from sports wagering is expected to jump to an estimated $25 million a year.
Nevada may be the only state where widespread sports wagering currently operates, but it may not be long before other states like New Jersey, who recently passed their own legislation legalizing sports wagering, open their doors to sports bettors. According to the National Gambling Impact Study Commission, the sports handle of our state currently only represents around 1% of the total amount wagered on sports illegally, estimated to be as much as $380 billion annually in a recent court filing made by the State of New Jersey. Instituting highly regulated and transparent avenues for groups to place legal sports bets is a boon to Nevada's economy and its lifeblood, the tourism and gaming industries.
It goes without saying that sports wagering contributes an untold number of direct and indirect jobs to Nevada, and broadening the means for legal sports bets to be placed will only enhance those figures.
Allowing registered entities to act on behalf of groups to pool wagers on sports bets will once again place Nevada at the forefront of gaming ingenuity while increasing transparency and revenues both to gaming companies and the state. It will mean new revenue for our state's education fund without placing any further burden on families or employers. Importantly, it will mean that we will be able to continue to get Nevadans back to work. Keeping Nevada in first place when it comes to gaming innovation is a win for all Nevadans.
Ruben Kihuen is a Nevada state senator for District 10 in Las Vegas. Brian Krolicki is the 33rd lieutenant governor of Nevada.