Nevada Paves Way for Legal Sports Gambling By Out-of-State Residents?

Print Friendly, PDF & Email

June 12, 2015

sports-gamblingLast week, the Governor of Nevada signed into law a bill that will ostensibly provide out-of-state residents with unprecedented access to Nevada’s sports books. The law allows for the formation and registration of business entities, likened to traditional mutual funds, to place race and sports pool wagers. Notably, the sports gambling law allows investors to join those entities and to share in the profits and losses from wagers placed at licensed Nevada gaming establishments, without any restrictions on the state of residence of the investor.

What are the sports gambling law’s requirements for compliance?

The law requires any business entity that seeks to place wagers at Nevada sports books to register with the Nevada Secretary of State and maintain an account with a bank or other financial institution in Nevada, from which the entity must transfer and receive all money used in wagering. The business must also maintain a wagering account at the sports book at which it is placing wagers, and keep all records provided by the sports books for the wagers it places. Additionally, the bill requires that the business entity provide various documents and information to the sports books themselves, including:

  • The entity’s formation documents and all filings with the Nevada Secretary of State; and
  • The name, address, social security number or individual taxpayer identification number and a copy of a valid photo identification that indicates that a person is at least 21 years old for each of the following:
    • every officer, director, manager, partner, equity owner, holder of indebtedness, and any person entitled to payment based on the profits or revenues of the entity;
    • every person who is paid any compensation by the entity;
    • every individual who is paid profits by the entity, on whose behalf a wager is placed, and who provides money to the entity for a wager or who otherwise receives a percentage of revenue from the wagering activity of the entity.

Potential Complications with the Nevada Sports Gambling Law

We have previously detailed various efforts to legalize sports gambling around the country, and how those jurisdictions ultimately run into conflicts with existing federal laws, most notably New Jersey’s ongoing battle with the federal government.   While Nevada lawmakers view the new law as a means to provide people additional options to participate in wagering in a legal way, there is a palpable risk that the law will draw the ire of federal government. In much the same way that the recent trend of the legalization of marijuana has seemingly existed in a legal grey area due to inherent conflicts between state and federal laws, the new Nevada law could perhaps be rubbing up against the outer contours of what the federal government deems acceptable under the current framework of federal gambling regulations, specifically the Professional and Amateur Sports Protection Act (“PASPA”) and the Wire Act.   Whereas PASPA was passed to outlaw sports gambling outside of a handful of grandfathered-in jurisdictions, including Nevada, the Wire Act, at its core, makes it a crime for anyone to transmit wagers or information that assist in the placement of wagers on any sports contest using a wire communication facility.   While the Wire Act was initially enacted to give the federal government the necessary tools to combat organized crime, conservative judges or federal regulators could nevertheless theoretically interpret the Wire Act as prohibiting the very activity that this new Nevada law seeks to facilitate: the use of wires to transmit money and information to place wagers from out-of-state residents to Nevada business entities.   As this law is rolled out, it will be fascinating for casual observers and gaming attorneys alike to monitor how the federal government responds to Nevada’s most recent attempt to liberalize access to its state-sanctioned sports books.

If you are interested in learning more about this topic or pursuing a venture in this area, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

Attorney Advertising

Similar blog posts:

Breaking News: David O. Klein Approved as First Out-Of-State Agent to Practice Before the Nevada Gaming Control Board

NBA Commissioner Advocates for Legalized Sports Betting

Fantasy Sports Pool Betting May Soon Be Legal in Nevada

David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

Schedule a Call
In The Know

Trending Topics

New York Sweepstakes Law blog- Klein Moynihan Turco

New York Sweepstakes Law: Are You Compliant?

Print Friendly, PDF & Email

In general, a lottery exists when entrants pay for the chance to win a prize. States alone reserve the right to administer lotteries. Businesses can eliminate one element of what would otherwise be an illegal lottery, in order to transform it into a legal promotional game. If the requirement to

TCPA surveys

An Ad or not an Ad: NY Weighs in on TCPA Surveys

Print Friendly, PDF & Email

Another day, another court decision that refines constitutes a Telephone Consumer Protection Act (“TCPA”) unsolicited fax advertisement. A Manhattan-based federal court recently issued a decision that removes faxed invitations to participate in a survey from the TCPA definition of advertisement. In drawing this distinction for TCPA surveys, the Court held

NY sports gambling law- Klein Moynihan Turco

Agreement Reached to Enact NY Sports Gambling Law

Print Friendly, PDF & Email

This week, Governor Andrew Cuomo and the New York State Legislature agreed to a budget deal that will bring mobile sports betting to the State through a unique NY sports gambling law.  Upon the Governor’s signature, NY sports gambling is primed to become the nation’s largest market. However, New York

UK and US Social Media Influencer Laws

UK and US Social Media Influencer Laws

Print Friendly, PDF & Email

In September of 2020, the United Kingdom’s (“UK”) Committee of Advertising Practice (“CAP”) reviewed the Instagram accounts of 122 UK-based social media influencers to determine whether content was being properly flagged as advertising in accordance with applicable social media influencer laws. This past March, the UK Advertising Standards Authority (“ASA”)

Share on facebook
Share on google
Share on twitter
Share on linkedin