UNLV Research Director: Esports regulatory process needs “streamlining”
Sharpr is a weekly newsletter covering the intersection of esports and betting
Hi everyone and happy Thursday.
Quick fun fact for my readers this week: Did you know that the only esports event whitelisted by the Nevada Gaming Control Board for wagering is the Golden Tee World Championship? Yeah, me neither.
This week we’ll dig into more insights gleaned from the Control Board’s first public hearing last Tuesday with a good friend of mine and member of the regulator’s esports advisory committee, Dr. Brett Abarbanel.
In this week’s edition of Sharpr…
Interview with UNLV International Gaming Institute’s Brett Abarbanel
West Virginia, Iowa advance esports betting legislation
Sportsflare launches first-ever Dota 2 player prop product
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UNLV Research Director: Esports regulatory process needs “streamlining”
As the director of research at the University of Nevada, Las Vegas, International Gaming Institute, Dr. Brett Abarbanel has a fairly advanced understanding of the gambling landscape. And one of her specialities and passions is esports.
Abarbanel is one of eight members of the Esports Technical Advisory Committee, a group of individuals appointed by the Nevada Gaming Control Board to foster esports betting in the state. Last Tuesday, she sat in front of Nevada regulators during the committee’s first public hearing at the Gaming Control Board’s offices as the group took a deep dive into key topics at the intersection of esports and gambling.
The regulatory infrastructure to support esports wagering stateside has been a long-desired integration for gambling stakeholders and bettors, and this committee has been tasked with helping solve this complex scenario.
“It’s not creating regulations, it’s advising the Gaming Control Board on what things they might want to include within existing processes,” Abarbanel tells Sharpr about the committee's role in this space.
She noted the limited selection of events Nevada residents can wager on in the state in this category. This notion was underlined during last week’s hearing when it was disclosed that Nevada had not approved a single esports event for wagering in 2021 – a sharp deviation from the year prior where regulators approved a dozen esports events for betting.
“There’s a couple of messages there – some of that may just be lack of awareness,” Abarbanel says. “[Esports betting] has been here for several years, I think it’s a matter of making it clear how that can even come about because there is an entire process that’s involved.”
Nevada’s current regulation allows sportsbooks to accept esports wagers on a per-event basis. This means that licensed operators hoping to offer markets on anything from League of Legends to Call of Duty must go through a cumbersome regulatory approval process, which Abarbanel says entails a considerable amount of paperwork, time, and sometimes, money. The combination of which highlights a clear barrier for esports betting in Nevada, as well as several other jurisdictions–like New Jersey–where laws are similar.
“There’s clearly a process and if nobody is applying for it, it’s potentially either too burdensome or it’s simply burdensome enough to not be worth going through it, she said. “There’s going to be the need for a lot of streamlining in this [regulatory] process.”
Unlike traditional sports, esports has copious elements–from it’s digital nature to the environment in which matches are played–that makes it unique to any other regulated activity. Whereas hockey may have procedures for equipment checks, esports would have its own for hardware and software inspections.
Even live spectators can compromise match integrity by relaying information to the teams competing on stage; this was highlighted first-hand when event organizer ESL Gaming implemented measures to address crowd interference during Counter-Strike: Global Offensive matches at IEM Katowice in February 2020.
“An organization like the NFL has that complete oversight–all of the games that exist within the NFL have to fit within their code of conduct. There are multiple layers of oversight there to try to avoid corruption issues or fraud or match-fixing,” Abarbanel adds.
So far, esports doesn’t have this singular sanctioning body, but Abarbanel thinks Nevada can play a key part in moving the needle stateside–particularly through information sharing and the establishment of a nationally accepted whitelist.
“While I think it’d be wonderful for these sorts of committees to exist in every single state, I don’t think they necessarily have to,” she said. “There are lessons that we can learn and we can put forth that other states are welcome to take advantage of that knowledge and advice and what fits best for their jurisdiction and apply it.
Abarbanel added there are agreements and collaborations between regulatory agencies, and that it’s possible that if you’re sanctioned in one that status will be shared among regulatory jurisdictions.
Esports betting in the U.S. has apparent roadblocks hindering its widespread adoption, but much of the ground work being done in Nevada and other jurisdictions is helping push this space forward in a meaningful and promising way, even if at a very incremental rate.
Still, Abarbanel stresses the three core things that will ultimately continue to dictate whether or not operators invest in this space is time, money, and energy. But to that end, what is the actual demand for esports betting? The answer is unclear.
“It’s hard to speak specifically to Nevada. We don’t necessarily have really clear evidence of specific demand in certain areas,” Abarbanel noted.
The pandemic served as a pivotal point in the esports betting sector’s development; with traditional sports leagues down for the count–sportsbooks turned their attention to competitive gaming, a market that would no longer be an accessory for operators, but a necessity. Beyond the towering spike in activity and discourse at the intersection of esports and betting, Abarbanel says the general interest in esports at-large acted as a catalyst for its prolonged growth.
“Clearly there’s enough interest from a group like the Nevada Senate to put a bill like this through, to form this committee and provide this kind of insight because that is what’s showing demand. It might not be demand in the form of people requesting specific bets, but there is a push across different stakeholders as well.
Abarbanel notes the esports betting movement is coming together not just from consumer demand, but from broader stakeholder demand, too.
“It’s harder to quantify because that’s not dictating the market in the same way the consumer demand might be, but it’s also incredibly important because that’s what is going to be the core of the provision of the product.
“There is an interest, it’s just a matter of showing where that interest can be directed.”
West Virginia, Iowa advance esports betting legislation
West Virginia and Iowa lawmakers are moving legislation through state Senates to legalize esports wagering in their respective states.
West Virginia introduced HB 4826 on Feb. 17 to expand the state’s sports betting industry and permit wagering on esports. The bill has since been approved by the state’s House of Representatives, and will head to the Senate for review.
HB 4826 defines an esports event as an “electronic sport or competitive video game played as a game of skill for spectators.”
West Virginia residents are currently able to wager on professional and collegiate sports competitions, both of which would be permitted should its esports legislation pass as presently outlined.
The state’s sports betting handle was $49.3M last month, up 28.9% year-over-year.
As for Iowa, it’s House of Representatives passed an expanding sports betting bill (HF 2497) that would establish esports as a wagerable category.
Iowa currently allows esports to be wagered on through fantasy apps, but does not permit licensed sportsbooks to accept bets on esports matches.
The Iowa Racing and Gaming Commission (IRGC) previously rejected a petition by sportsbooks to add esports betting.
The bill would additionally allow casinos to utilize cashless payment options such as digital wallet.
President and CEO of the Iowa Gaming Association Wes Ehrecke tells PlayIA the IRGC has “signed off on leveling the playing field.”
“Nationally and globally there is a fairly robust esports fan base,” Ehrecke said. “So I imagine there would be interest in the state if wagering on collegiate and pro esports events are offered.”
The bill is now on its way to the Senate Committee on State Government for review before it’s put on the Senate floor for a vote. To cross the finish line, HF 2497 will need to advance from the committee by March 18. If passed, the bill wouldn’t take effect until July 1.
Sportsflare brings player prop markets to Dota 2
Esports odds provider and Tiidal Gaming subsidiary Sportsflare have launched Dota 2 player prop markets for its platform.
Sportsflare will become the first-ever odds provider to deliver a fixed-odds Dota 2 player prop product.
The product will feature props on player kills over/under for each map, and is said to be available for all top Dota 2 esports competitions.
The oddsmaker also supports Counter-Strike player prop coverage, with League of Legends to follow soon.
Sportsflare’s prop markets are said to be facilitated through an “artificial intelligence driven pricing model” and will be available for sportsbooks licensing the oddsmaker’s data. Company officials declined to comment on specific bookmakers part of this group, but did note it’s currently available to over 50 platforms through a partnership with EveryMatrix.
Sportsflare Founder & CPO Kenny Jang tells Sharpr it will look to further expand its Dota 2 player props to include markets such as KD ratios, least kills, and possibly even assist-based markets. As with traditional sports, player props are a huge part of the betting experience, and Jang agrees markets such as those they’ve just launched through Sportsflare will play a role in deepening fan engagement.
“Player props are hugely important for esports betting and are currently underserved,” Jang said. “It finally gives esports fans opportunities to back their favorite players and [increases] the engagement level.
🗞 In the news
Real Luck Group appoints former PokerStars director and Mr Green CEO Bo Wänghammar to its board of directors.
Esports Entertainment Group has completed its public offering of common stock and warrants, raising $13.6m.
Take-Two Interactive Director J Moses will serve as a strategic advisor to data provider GRID Esports.
📈 By the numbers
Sportradar flagged 903 suspicious incidents worldwide in 2021, the highest number of suspicious incidents in one year since the company began monitoring matches 17 years ago.
Gaming job opportunities increased by 5% in 2021 compared to the previous year, according to Hitmarker.
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Reach me directly at Cody.Luongo@wagers.com or on Twitter: @Luongo_Pro