New committee looks at expanding esports wagering in Nevada

March 3, 2022 7:02 PM
Photo: Shutterstock
  • Buck Wargo, CDC Gaming Reports
March 3, 2022 7:02 PM
  • Buck Wargo, CDC Gaming Reports

A newly formed advisory committee looking to expand esports betting in Nevada heard testimony Tuesday about the opportunities to appeal to a younger audience, including from casino operator Boyd Gaming that’s looking to launch head-first into the new vertical.

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The eight-member committee consists of people who track, work in, and work with the esports industry, and will be holding a series of meetings before providing recommendations to the Gaming Control Board on making Nevada a leader in esports betting.

Esports betting has been slow to take off in the state; casinos must seek special permission to take wagers on each tournament and league play. No esports wagers were taken in 2021 after an uptick in 2020, when professional sports leagues were shuttered by the pandemic.

The interest in expanding esports betting is already building in the Nevada gaming industry. Eric Bowers, vice president of innovation at Boyd Gaming, told the committee about the company’s interest in it.

“It’s fantastic that this committee has gotten together, and when I look at the members, it fits into our strategy as we try to be a leader in this space, particularly in partnership with you in Nevada,” Bowers said.

Boyd, which operates in 10 jurisdictions and is expanding its igaming, social gaming, and online race and sports betting, looks at esports as a “opportunity to grow revenue based on the product itself and as a feeder into our core online product with demographics that we haven’t touched on yet,” Bowers said.

“We don’t believe all of these potential esports wagers are going to convert right to races and sports wagers,” Bowers said. “They may convert to igaming and social gaming. We believe that the demographic is a little different and even in the intent to launch esports, we’re not necessarily going to target (from a branding and marketing perspective, that it’s another channel of sports wagering). We feel it gets lost in that.”

Bowers told the committee of Boyd’s interest in including in-play wagering on esports as part of any expansion in the state, rather than just wagers made ahead of competitions.

“I think it would be a deal breaker if we didn’t have that. We look at it as more of a primary building block than match-based wagers in our launch, and we’re looking at technologies to support that,” Bowers said.

Boyd is also looking at pari-mutuel proposition wagers, which makes in-play betting even more critical, Bowers said. They want to launch wagering with events sanctioned by publishers of the games, which traditionally include League of Legends, Call of Duty, and others, and be able to plan events.

“What a great way to end this meeting with support from such an important Nevada licensee like Boyd Gaming,” said Committee member Seth Schorr, CEO of Fifth Street Gaming, which manages the Downtown Grand in Las Vegas and has been behind efforts to bring esports wagering to Nevada. “If any naysayers out there still think the sportsbook operators don’t want esports betting, you can put that to rest.”

Schorr said he’s had an opportunity over the years to work with a number of operators who had an interest in esports. That allowed them to “dip their toe in the water, but they didn’t see the results that they were looking for, for a number of reasons. The way you and Boyd approached this with a full strategy in mind is commendable.”

Bowers said one challenge to operators is dedicating space for esports events to draw customers, when space is needed for casino games with a guaranteed return. That’s not the case here with wagering.

“Focusing on the online engagement we have now is terrific, and anything we can do to evangelize in partnership with the community, we’d love to be a part of that,” Bowers said.

Jeff Cohen, vice president of corporate strategy at the Esports Entertainment Group, which has been allowed by New Jersey to accept esports wagers, applauded Nevada gaming regulators for putting together the committee and recognizing esports as a potential growth area for gambling.

“By taking this initiative, you’re already ahead of the vast majority of state regulators in addressing this area,” Cohen said.

Cohen said there’s a lot of misconceptions about the esports industry among regulators and lawmakers.

“We often hear concerns that gaming and gambling shouldn’t be mixed because of the young age of gamers,” Cohen said. “Just a few weeks ago when asked about esports, American Gaming Association President and CEO Bill Miller said this is not an area that’s been opened up. The people primarily playing esports are underaged and betting on them creates a whole host of issues. While we certainly respect Mr. Miller’s perspective and leadership at the AGA, when you evaluate the data, it turns out not to be the case.”

Cohen said it’s true that professional esports teams have players under 21, but there’s no reason why that’s dangerous compared to betting on college football and basketball where most players are under 21.

“While it’s also true that the average age of an esports bettor skews about a decade younger than that of a traditional sports bettor, our belief is that makes it even more important to legalize and regulate the product,” Cohen said. “Plenty of esports betting is already taking place. It’s just being done on offshore sites that don’t have the proper controls in place. Once it’s legalized and brought into the light of day, we can ensure that no underage gamblers are able to access our software. This will ensure a safer ecosystem for all involved.”

As for concerns about cheating and match fixing, Cohen said there have been incidents of impropriety, but only in low-quality leagues that lack the framework and oversight. Cohen said they would never take bets on those leagues, but only ones that are mature with strong integrity protocols and working with the international Esports Integrity Commission and others to ensure compliance.

“We don’t believe there’s any greater level of integrity issues inherent in esports than there are in other sports like tennis, rugby, and even soccer, all of which have had their fair share of controversy at different levels of leagues,” Cohen said. “As esports leagues have become more professionalized and player salaries have increased, we believe the incentives to throw matches has dramatically decreased.”

Esports Integrity Commission Commissioner Ian Smith told the committee there’s been strong growth in global esports betting and that “cheating to win” has been dealt with by publishers and tournament organizers. Hacking software would be a threat to the game, and publishers take that seriously so their brands aren’t damaged.

Someone playing to lose can easily be spotted by tournament officials, Smith said. There are unanswered questions whether drugs that calm the system can affect play, he said.

“Where this is a market, there are always people trying to manipulate it,” Smith said. “The only question is whether it’s succeeding. Match fixing is driven by betting across all sports and esports is no exception.”