NEVADA ESPORTS BILL SEES REGULATORY BODY TURN ADVISORY GROUP

(This post was created by Mark Hamilton, Jr., a rising 3L at Marquette University Law School and intern at Quiles Law)

The State of Nevada has been working on legislation relating to esports for a significant amount of time. Since its inception in March 2021, the purpose of Nevada State Bill 165 (“Esports Bill”) was to help increase economic activity in the State through the draw of esports events. Nevada wants to be one of the first locations mentioned when it comes to hosting an esports competition. But, what does being first entail? Initially, this proposed Esports Bill was to be the first of its kind, creating a regulatory body for esports events in the State. What Nevada overlooked, though, is the reluctance of developers and other organizations to cede power and control to an independent commission.
 
Ultimately, the Esports Bill has been passed and signed by Governor Steve Sisolak. However, the bill is not what it once was. At the strong urging (and threats) of esports game developers, there have been major changes to the bill. In this blog post, I will discuss the Esports Bill, its original intentions, and its final form.
 
Nevada Esports Bill: Original Plan
Since first drafted in March 2021, the Esports Bill intended to create an independent regulatory commission. This commission was to resemble the Nevada Athletic Commission, which is responsible for the governance of mixed martial arts in the state.
 
The commission was going to be tasked with creating regulations to govern esports competitions. Some of the areas that would be regulated included integrity of competition, testing for controlled substances, qualifications for hosting and participating in tournaments, and approval of venues. The Esports Bill also would have given the commission the ability to create enforcement processes/mechanisms for the regulations. In other words, the State of Nevada could have made a violation of the commission’s rules a misdemeanor.
 
Nevada Esports Bill: The Changes
The major opponent to the original plan of the Esports Bill was the Entertainment Software Association (“ESA”). The ESA is an association that serves as a voice for the video game industry and focuses on building the “best future” for the industry overall. ESA believed that the proposed bill and its increased regulation on esports events would actually harm the growth of the industry. In fact, the ESA believed that if the Esports Bill were to be passed in its original form, the likelihood of Nevada being the leader in esports events, as it desired, would be severely diminished. However, ESA was not opposed to Nevada growing and helping foster the development of esports overall, but simply resistant to increased regulation.
 
Responding to such concern, Senator Ben Kieckhefer (the sponsoring senator) proposed amendments that made significant alterations to the Esports Bill. The amendments created an Esports Technical Advisory Committee with the members being appointed by the Gaming Control Board (Gaming in the gambling sense of the word). The necessity of this change was vital to ESA, as it feared an entirely independent regulatory body. Considering ESA’s concerns, Nevada feared that publishers and tournament organizers might decide to avoid the State of Nevada altogether and host events elsewhere if the independent regulatory body were to remain in the Esports Bill.

The Nevada Esports Bill as Signed into Law
The bill itself is straightforward and short. The Gaming Control Board is to appoint members to the Esports Technical Advisory Committee that consists of industry professionals. The professionals could include anyone spanning from game publishers to hosts to broadcasters and even participants. Once the Committee is developed, they will be tasked with providing recommendations to the Board on how to safeguard the integrity of Esports, especially when wagers are placed at such competitions. The bill goes on to state that the Board may adopt regulations as necessary to carry out and further the recommendations of the Committee.
 
While the bill is not lengthy by any means, it represents the State’s furtherance of its efforts to attract esports to Nevada, and in concept, is something other States will likely emulate.
 
Conclusion
The Esports Bill which was signed is vastly different from how it was initially conceived, and frankly, removes much of the teeth included in the initial legislation. While the creation of an advisory group is welcomed, the removal of any independent authority from the group makes its efforts subject to the approval of the Gaming Control Board. Inherently, the Gaming Control Board is concerned with gambling, betting, and integrity endeavors, and while esports betting is a lucrative piece of the industry, there’s so much more to esports than just betting. Nevada had an opportunity to raise the playing field with its legislation, and instead punted. Here’s to hoping that similar legislation by other States encourages Nevada, and others, to enact regulations with teeth as it pertains to esports.