In the long run, Nevada’s protectionist approach to sports betting is going to cost industry players more in lost opportunity than competition ever would have — and that’s to say nothing of the frustrations it causes consumers.
When the U.S. Supreme Court opened the door for online sports betting in 2018, the casinos in Las Vegas knew they were about to lose the monopoly they had over the market. After all, as mobile gaming apps started coming online, it was obvious to almost everyone the days of flying to Vegas and standing in line in a smoky sportsbook somewhere along the Strip would soon be a thing of the past.
Thanks to the crony nature of Nevada’s gaming regulations, however, those lines aren’t entirely gone just yet.
In Nevada, unlike virtually every other state that allows mobile sports betting, consumers are required to sign up at a licensed sportsbook associated with the app they’re about to use before they’re allowed to place any wagers online. On its face, this seems like a minor annoyance for potential consumers, but that minor annoyance actually has a tangible impact on the local market.
As such, it should be no surprise that operators in Arizona — a state that is, decidedly, less of a gaming mecca than its western neighbor — recently took in more from sports betting than the Silver State.
Given the missed opportunity to separate millions of dollars from willing consumers, some Nevada casinos and sportsbooks have grown more comfortable with the idea of changing the state’s in-person requirement for online betting. After all, joining the 21st century and making the process as accessible as ordering an Uber would likely bring in plenty of fresh money from would-be gamblers.
Indeed, from an economic perspective, there’s plenty of reason to believe that remote registration would likely increase, rather than decrease, overall revenue for popular sportsbooks — even if it means fewer people standing in lines at local gaming establishments.
For starters, dropping the in-person requirement would expand the market to countless locals who simply refuse to trudge their way into a property for the sole purpose of registering in person. Similarly, ensuring cash-flush tourists could effortlessly place wagers from their smartphone while eating dinner, waiting for their Uber or pouring money into a slot machine — without queuing at the little customer service desk in the far corner of some dimly lit sportsbook area — seems like a potential gold mine for extra gaming revenue.
However, industry leaders expressing support for reforming the state’s regulations on mobile sports betting are still outliers, with much of the industry fighting to maintain the state’s in-person registration requirement for would-be customers.
It’s quite clear, from the industry’s own comments, that the consumer experience is not the primary consideration for their support of the in-person registration requirement. After all, remote registration for online gaming apps is clearly not a major security risk, as is evidenced by the simple fact that Nevada is the only jurisdiction where such a requirement remains in place.
Instead, the industry has been straightforward about its desire to keep the idiosyncratic rule in place as a means to benefit the state’s existing gaming operations.
Industry leaders in Nevada have argued that in-person registration is necessary to their business model — ensuring those operators who invest in brick-and-mortar locations are able to earn a profitable return on their capital investments by requiring would-be gamblers to wander among the slot machines rather than merely pulling up an app on their smartphone. However, if a casino is so desperate for ancillary revenue that a potential customer’s single trip to a sportsbook for registration is the difference between massive profits and bankruptcy, there are probably larger concerns than mere foot traffic.
Besides, regulations aren’t supposed to exist for the monetary benefit of industry actors, nor do they exist to protect an industry from competition. And, unfortunately, the latter is pretty much the only thing Nevada’s in-person registration has actually accomplished.
Because large out-of-state competitors don’t have a physical location in Nevada, residents (and even tourists) are prohibited from spending their money anywhere other than a local sportsbook. The status quo essentially behaves as a regulatory wall barricading the Nevada market from the rest of the nation — and let’s be honest, that’s a pretty convenient side effect for the corporate interests that are intent on dominating the local market.
No wonder so many Nevada operators have long been the most vocal opponents to abolishing the state’s frustrating in-person registration requirements. The corporate cronies who have fought hard to keep consumers inconvenienced have apparently decided they’d rather remain dominant in a comparatively weak marketplace than put in the hard work of innovating enough to remain relevant in a growing one.
As a result, consumers in roughly 40 other states currently find it easier to place sports bets than those of us who live in one of the world’s most prominent gaming destinations. And while that might be frustrating for consumers, and a bit puzzling for tourists, it also means Nevada operators and state coffers are missing out on their share of the online gaming gold rush taking place in markets all around us.
Michael Schaus is a communications and branding expert based in Las Vegas, Nevada, and founder of Schaus Creative LLC — an agency dedicated to helping organizations, businesses and activists tell their story and motivate change. He has more than a decade of experience in public affairs commentary, having worked as a news director, columnist, political humorist, and most recently as the director of communications for a public policy think tank. Follow him at SchausCreative.com or on Twitter at @schausmichael.
