Senator Ben Kieckhefer (R-NV) introduced Senate Bill 165 on March 2 to the Nevada state legislature in order to establish a state esports commission that would govern and regulate competitive video-gaming. It would be the first of its kind formulated as a result of the meteoric rise of esports worldwide. The intention of this bill is to promote and protect the integrity of esports competition. Esports is a nearly $1 billion dollar industry in the United States and Nevada has a vested interest in protecting and regulating the integrity of the sport which has been a significant revenue generating opportunity for the state. Between the state’s betting industry and the competitions hosted in its esports-specific stadium, the HyperX Esports Arena, Nevada has a vested interest in protecting the fairness of a sport generating vast opportunity.
If signed into law, the commission would be comprised of three members appointed by the Governor who are residents of Nevada. Action or decision-making by these members would require a majority agreement. They would not be compensated for their duties on the commission and are not allowed to be members of the legislature or hold office in the state. In order to have a well-informed and diverse commission, the bill mandates that one member has expertise in esports, another in information technology, and one who must have training or experience in the law enforcement of cybercrime, hacking, or fraud. Members would each serve four-year terms. Aside from this committee, there are other provisions provided in this bill to create guidance in the regulation of esports.
“As more states move closer and closer towards sports betting legalization, it is important that there is oversight for the competitive integrity of esports to be ensured and for equitable outcomes to be provided.”
In addition to the commission, Kieckhefer proposes that a “technical advisory committee” be created that will be comprised of individuals from varying areas of expertise that would advise and consult the committee to ensure that the regulations suit the needs of the industry. This, however, will not require that members be Nevada residents in order to ensure that all the areas of interdisciplinary expertise of esports are adequately represented. An executive director would also be appointed who would apply for grants and accept gifts and donations in support of the commission.
Senator Kieckhefer believes this is a significant growth opportunity for the state. “If we can position Nevada and Las Vegas as a thought leader in esports, it could absolutely attract the right companies, tournament organizers, developers, and the millions of fans that associate themselves with esports,” he added. The Nevada sports betting market could see increased growth if this bill becomes a law. Right now, the global esports betting experiences over $15 billion in revenue making it the seventh biggest sports industry in the world in terms of betting revenue.
If the commission becomes established by the state, what exactly would be regulated? The bill states that events that offer winnings over $1,000 would be required to register for the commission and would have to agree to certain rules that the commission would enact. This bill allows the commission to adopt regulations and rules while providing procedural enforcement for hosts and participants. It also sets out that the commission may be able to make rules violations misdemeanors in the state, but the senators came to a consensus that this would be struck from the final bill. “The goal here is not to put up so many guardrails that we prohibit esports from coming or scare people away, but to show the publishers and the public that we understand it in a way that we can help make it better, bring it here and cast it in the biggest light possible,” said Paul Hamilton, president and CEO of Atlanta Sports Ventures.
As more states move closer and closer towards sports betting legalization, it is important that there is oversight for the competitive integrity of esports to be ensured and for equitable outcomes to be provided. Given the infrastructure of Nevada’s sports betting and overall gambling industry, they would be an ideal first state to establish a commission for other states to eventually follow. “Well, I think anytime you have events that start drawing thousands, if not tens of thousands of people who are paying good money to attend, there needs to be a certainty that the events are being run with integrity,” says former MGM Resorts top executive Alan Feldman. If passed, the commission would be effective starting January 1, 2022.