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Nevada Moves to Create Esports Commission

The State of Nevada has taken to the initials steps to create an official commission governing esports with the introduction of Senate Bill 165, and its subsequent discussion in a hearing of the Nevada Senate Judiciary Committee on March 17, 2021. The proposed commission would be tasked with creating regulations overseeing esports competitions within the state. Such a move is the first of its kind in the US, and a major step as esports continues to move into the mainstream.

The size and composition of the commission was still being worked out, though the current draft of the bill calls for a three person commission which would promulgate regulations in areas such as integrity of competition, testing for controlled substances, qualifications for those hosting and participating tournaments, and approval of venues hosting competitions. The bill also empowers the commission to create enforcement mechanisms for these regulations, including making such violations a misdemeanor in the state. Although the current draft of the regulation imposes criminal penalties for violations, during the hearing there was a consensus among the senators that these should be struck from the final bill.

In an interview with the Esports Observer, Ben Kieckhefer, the senator sponsoring the bill, indicated that he views esports as a significant growth opportunity for Nevada, and that he believes “it is going to be a dominant force in the entertainment industry going forward.” Kieckhefer added “If we can position Nevada and Las Vegas as a thought leader in esports, it could absolutely attract the right companies, tournament organizers, developers, and the millions of fans that associate themselves with esports.” SB 165 models the proposed commission on Nevada’s Athletic Commission, which successfully helped bring mixed martial arts to Nevada while the sport was still in its infancy.

Kieckhefer also proposed during the hearing that bill be amended to require the commission to create a “technical advisory committee” comprised of individuals with a variety of different expertise to assist the commission and ensure that the regulations appropriately suit the needs of the industry. Notably, the technical advisory committee would include individuals from outside of Nevada to ensure that all required areas of interdisciplinary expertise would be adequately represented.

Creating a commission backed by the force of law to specifically oversee esports may provide some comfort to certain industry stakeholders who have expressed the concern regarding competitive integrity of the sport and the lack of oversight by a universal governing body. While the commission’s limited jurisdiction may disappoint those that hoped for a governing body with an extended reach given esports international footprint, this may represent a significant step towards achieving such a goal. It certainly makes sense for Nevada to be the first state to consider such a move given its strong ties to the gaming industry.

Although esports betting experienced its first moment in the spotlight as a result of the 2020 COVID-19 Pandemic, there is still massive room growth. An important component of this is that the commission’s oversight of competitive integrity allows for sports books which may have been hesitant to move into esports to expand their offerings with the knowledge that the outcomes are equitable. Kieckhefer clarified during the hearing that the commission would not directly be involved with regulating gambling related to esports competitions, but acknowledged that the effect that the commission’s oversight of competitive integrity would have on esports betting was part of his motivation for introducing the bill.

SB 165 still has a ways to go before becoming law, but we are keeping an eye on it as it makes its way through the legislature.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XI, Number 78
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About this Author

Ethan R. Aronson Entertainment litigation attorney Sheppard Mullin Law Firm
Attorney

Ethan R. Aronson is an attorney in the Corporate Practice Group in the firm's New York office.

212.896.0658
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