Nevada i -Gaming. A Workshop. Nevada iGaming. Greg Gemignani Lionel Sawyer & Collins +1 702 383 8989 [email protected] Agenda Topics. Clear some of the misconceptions regarding interactive gaming in Nevada History of iGaming in Nevada 2011 Legislative Session AB258 SB218
Activities in Nevada have caused some confusion in reporting and perception because of Nevada’s unique nomenclature and gaming history.
Nevada uses a somewhat unique set of terms to describe different forms of networked gaming.
These same terms are sometimes used in other jurisdictions, but do not always have the same meaning as they do in Nevada
Additionally, Nevada’s sports wagering industry, which is unique in the U.S., adds to the confusion in understanding the of permitted sports wagering activities in the U.S.
In 2001, the Nevada legislature enacted the first interactive/online gaming statutes in the U.S.
The 2001 legislation envisioned an industry similar to terrestrial gaming, namely, one in which operators (casinos) and manufacturers (gaming device manufacturers) were the only licensed supply side participants.
The 2001 legislation limited operator licenses to large casino operators.
As part of the enabling legislation, the legislature required the Nevada Gaming Commission to make certain findings.
Among those requirements was a requirement that the activity could be conducted in compliance with federal law.
A letter from the Department of Justice in 2002 indicated that the U.S. DOJ believed that the conduct of interactive gaming would violate one or more federal laws, including the Federal Wire Act.
This ended the regulatory activities related to iGaming in Nevada in 2002.
SB218 was the final bill that included concepts from other bills and was the bi-annual omnibus gaming bill.
SB218 recognized that the licensed operator and manufacturer model of iGaming expressed in the 2001 legislation was an outdated concept.
In response SB218 introduced the concept of a “service provider” as a licensed or licensable activity.
For the first time in Nevada history, a gaming investigation could begin without the applicant having first executing an agreement or initiating an activity that requires licensing.
Provides assurance to licensees that an applicant is suitable.
Allows for appropriate risk planning prior to expending deal making, financing or purchasing efforts.
In July 2011, Senator’s Kyl and Reid, in response to the intrastate lottery activities of Illinois and New York, asked the DOJ to once again affirm its opinion that the federal wire act applied to all forms of wagering.
On December 23, 2011, the DOJ issued an opinion that it now interprets all of the Federal Wire Act prohibitions to apply solely to sports wagering. Therefore the intrastate activities of the Illinois and New York lotteries were outside the scope of the Federal Wire Act.
The opinion is just that, it is the DOJ’s current opinion.
A future DOJ may rescind or reverse the Obama DOJ opinion just as the Obama DOJ opinion reversed opinions of the Clinton and Bush eras.
It mitigates, and during the Obama administration eliminates, the risk of federal prosecution of gambling activities under the Federal Wire Act for anything other than sports wagering.