The Nevada Gaming Commission Thursday narrowly approved a West Hollywood-based startup as the newest casino owner and sportsbook operator in the state, despite concerns over a lack of experience and funding.
By a two-to-one vote, the Commission approved ZenSports to operate the Big Wheel in Lovelock, 90 miles northwest of Reno. In addition, it will operate, but not own, the sportsbook at Baldini’s Sports Casino in Sparks. The approvals last for two years, at which time the company must return to the Commission.
As early as 2022, ZenSports is looking to disrupt Nevada’s sports betting industry by accepting cryptocurrency and offering peer-to-peer sports wagering. Neither of those options is currently allowed in Nevada and will need Commission approval. The company’s sports betting would be offered statewide via a mobile app.
ZenSports is buying the Big Wheel Casino from Strategic Gaming Management, which also owns Baldini’s. Big Wheel serves truck drivers and miners in the northern Nevada city of 2,000 people. It has 48 slot machines, but no sportsbook.
The licensing was opposed by Commissioner Rosa Solis-Rainey, who said it should be referred back to staff so ZenSports can improve its application. She was raising concerns over the company’s lack of funding and experience.
“I’m not prepared to support it with what we have in front of us,” Solis-Rainey said. “We basically have one person who has a significant amount of experience. They don’t have the resources to adequately staff now (for compliance).”
Commissioner Steven Cohen called it a difficult licensing application. He said he’s not 100% certain he’s doing the right thing, but admitted it’s about giving ZenSports a chance.
“I can’t decide whether you’re dreamers or geniuses,” Cohen said before recommending approval. “After hearing what you said today, I still don’t know what the answer is. I’m still concerned about your financing. One thing that gives me comfort is you have no debt. You’ve got two years to get this done right — shore it up, get a compliance committee, and get your financing.”
This would be the first step in the growth of ZenSports in the U.S. after launching in Europe in 2019. In June, the company ceased its international operations in 10 countries (Romania, Finland, Norway, Sweden, Denmark, Estonia, Japan, Moldova, Slovakia, and Slovenia) to focus solely on the American market.
ZenSports CEO and founder Mark Thomas, who has a background in real estate and software, said the company has a little less than $1 million in funding, but will be raising more. Some $90,000 of the $250,000 he invested in the company in 2019 was from gambling winnings at craps and pai gow.
“We have plans to raise millions and millions of dollars in the very near future and it’s not going to be any problem to raise those funds,” Thomas said.
Commission Chairman John Moran asked Thomas how ZenSports will differentiate its brand in Nevada and what niche it will have to successfully compete.
“There are a lot of games out there, and you’re not going to be the only game in town,” Moran said. “How are you going to build a better mousetrap when people have been doing it for years and years?”
Thomas said they’ve “test-driven” their product on sportsbooks and have spent a lot of time creating an app that performs well and makes people feel like they’re on a social network. He cited their plan to offer peer-to-peer sports betting and digital currency as important for their future.
“We believe that offering consumers the choice to bet against the house or peer-to-peer is a big differentiator,” Thomas said. “On the cryptocurrency side, we believe there are some really great opportunities as well.”
Moran said what makes the licensing noteworthy is this is not a big company, but one with only 15 employees. He said the two-year licensing will give them a chance to perform “and show us what they’re all about.”
Company officials thanked the Commission for giving it a chance to succeed. Thomas told Commissioners ZenSports won’t let them down.
“I hope to see that,” Moran said. “In Nevada, we like to bring people like you here. When you pick Nevada to do business, that makes us very happy.”
