Did you know that you can legally invest in sports betting funds based in the State of Nevada? In early June, Nevada issued a new law that allows sports books to accept wagers from business entities organized in Nevada, even if those entities are funded by individuals outside of the state. However, almost four months have passed without any action provided by these permitted “sports betting investment funds.”
The passing of new legislation geared toward legalizing these funds came with a bit of fanfare, but there has been little talk of developments ever since. However, behind the scenes, a few entities have been getting prepared for the day that sports books accept their deposits.
One such startup is Bettor Investments, LLC, which claims to be the first and only legalized sports betting investment group in Nevada since the new law was enacted. It is nearly impossible to defend such a claim, since no sports book has yet to do business with Bettor Investments, LLC or any other entity that may have been organized as a sports betting investment fund to date. Furthermore, my law firm has been contacted by an entity that has expressed sincere interest in the space.
Will sports books be counting the money rolling in from sports betting investment funds? (AP… [+] Photo/John Locher)
“We are waiting on the Nevada Division of Gaming. None of us can go through with proceeding to getting investors until the Division of Gaming comes through with rules and regulations. We just don’t know what the timing is going to be on that,” said Matt Stuart, Founder and Managing Member of Bettor Investments, LLC.
Technically, Stuart could start to make his pitch to investors. Additionally, he is not necessarily waiting on the Nevada Gaming Control Board. In actuality, the only group that is holding back any effort to get sports betting investment funds operating are sports books, which may accept wagers from these entities that must maintain an account with a bank or other financial institution that has a presence in Nevada. Those sports books are waiting on the Nevada Gaming Control Board for some additional assurances.
“The Board’s been contacted by various entities and have reached out to various licensees,” explained Karl Bennison, Chief of Enforcement Division, Nevada Gaming Control Board. “We’re crafting regulations and have had one public workshop and probably another this month. Technically, the way the bill is written, a licensee can go forward without waiting on the regulations, but I don’t believe any licensee will be doing that.”
Bennison prefers the law in the way it was enacted as opposed to how it was originally proposed. It was previously suggested that the Board would be charged with vetting, reviewing and approving sports betting investment funds. The law; however, charges licensed sports books with crafting an application and vetting process. The Board simply receives a notification after the applicant has been vetted.
“Our preference to be hands off. We didn’t want to be the vetting party,” said Bennison in a conversation with me at the Global Gaming Expo in Las Vegas, Nevada. “Sports books are taking on the burden of responsibility. I have law enforcement concerns; I have regulatory concerns. I like the way it unfolded because the responsibility rests with the operator and licensee.”
“Now that it has been approved, that’s when the entrepreneurs and creative people get in there and see what they can do within the language of the law,” added Bennison. “I kind of liken it to daily within fantasy sports. The feds, when they crafted their language, it was hard to foresee all the models. I’m happy that we now have a law and can clear up any grey area . . . ideally.”