US sports betting: "The unmet demand will drive revenues regardless of the quality of regulation"

The University of Nevada, Las Vegas (UNLV) on January 10 launched a new executive online training program in gaming law and regulation at its William S. Boyd School of Law, in partnership with global gambling operator Entain. It targets operators, suppliers, regulators and non-lawyers working in the gaming industry. 

One of the academic specialists who helped design the curriculum for this program is Anthony Cabot, Distinguished Fellow of Gaming Law, who is in charge of one of the courses, Introduction to Gaming Law and Regulation. Yogonet spoke with Cabot to delve further into the program's approach and novelties, the key concepts behind this specialized training including global regulatory challenges, junkets, Macau, areas to be improved in Nevada, the lessons from New Jersey, cashless wagering, among other topics.

The UNLV William S. Boyd School of Law has once again launched new executive online courses in gaming law and regulation. Like in the first quarters of 2021, you will be teaching Introduction to Gaming Law and Regulation. Could you outline the essential topics this course will address this year?

The introduction to gaming law is broadly divided into modules that include the public policy concerning legalized casinos, the economics of legalized casinos, regulatory structure, licensing, operational regulations, accounting and internal controls, anti-money laundering, crimes, advantage play, enforcement and internal compliance programs. These, and other topics are spread across about twenty structured lectures and exercises.

Which changes or additions could we expect this year, based on the ever-evolving regulatory landscape in the US, and worldwide? Which learnings, new case studies, and key takeaways from last year do you plan to leverage for this year’s lessons?

The study of gaming law is evolving, and the course content shifts according to developments. For example, the controversies regarding the use of junket representatives in Macau and Australia require spending more time on the nature of what junket representatives do, how their actions can impact a jurisdiction's ability to achieve their policy goals, and potential regulatory responses from banning junkets altogether, limiting the authority of junket representative or requiring some level of licensing.

Another interesting and evolving topic is Macau, which relies very heavily on visitors from Mainland China. The Chinese government's ability to deter premium players from spending their money at the Macau casinos and limit more casual visitors from entering Macau shows the vulnerability of a casino-centric model that doesn't draw tourists from other jurisdictions.

We are seeing more and more US states bringing new regulations for the sports betting and online betting markets, most recently in New York, and also gambling expansions including new tribal gaming compacts, like the case of Florida. What is your key approach to provide the necessary resources and expertise to successfully analyze, make decisions over these emerging legislations and regulations, and be able to adapt to their diversity tailored to each state? Could you name examples of both successful and unsuccessful gaming regulations in the US?

Trying to pick winners and losers in terms of regulatory implementation is premature. Typically, you need years and often decades to evaluate the success or failure of a regulatory system. New Jersey is a good example. When it first opened, it prided itself on having a stringent regulatory system. But, the myriad of missteps, including ineffective overregulation in some areas and under-regulation in others, was not evident in the early years as the unmet demand for casino gaming resulted in monopolistic profits. But with competition and economics, the regulatory deficiencies were exposed, and the industry almost completely collapsed. New Jersey recovered much of its lost revenues by significantly revising its regulations. Still, it lost its first-mover advantage and never realized its potential to become the east coast version of Las Vegas. 

The same is true with this rapid expansion of sports wagering in the United States. The unmet demand will drive revenues regardless of the quality of regulation. But the market will settle. After that, the jurisdictions with more thought and customized regulatory structures and better educated and trained regulators will promote healthier industries with fewer ancillary problems such as betting scandals, corruption, and problem gambling. To date, I have mainly been unimpressed with how state governments have approached sports wagering regulation.

How would you assess current gaming legislation in Nevada, mainly regarding land-based casinos, online gaming, sports betting and esports betting? Are there any aspects or areas you think need to be improved or updated? What do you expect from the newly created Esports Technical Advisory Committee in that sense? 

Nevada does a very good of regulating a unique gaming market, given it is an open competitive market with literally thousands of licensed locations. Its regulatory process has evolved over the years to address issues and developments. One area that needs improvement is problem gambling and responsible gaming. Nevada could ignore the issue for most of its history because it had a small population, and any problem gambling effectively left the state with the affected tourist. This is no longer the case as Las Vegas has become a major US city. The government will need to confront this as a community health issue at some point. Another area that could improve is a rewrite and simplification of the existing laws and regulations. The government simply added new laws to address new developments as they evolved. As a result, the regulations simply expanded with every given year. When gaming law becomes a complex legal scheme created by bureaucrats who apply it and the lawyers who interpret it dominated by bureaucrats and lawyers, the result is a complex system that makes no pretense of being accessible or understandable by the frontline workers.

I am not certain what will come out of the eSports Advisory Committee. I think the industry has to be very cautious in this area. The regulators need to assure that any eSports competitions offered for wagering are conducted fairly and honestly. This may be difficult if, unlike the software that controls gaming devices, the regulators cannot review the software that controls eSport competitions. Likewise, you need to ensure that the operators of the eSport competitions are suitable and have proper controls in place. Finally, it is a mistake to allow wagering on events with underage competitors.

The curriculum is designed for operators, suppliers, regulators and non-lawyers working in the gaming industry. What are the key criteria and considerations to craft the curriculum addressing this kind of profile and meeting their current demands? The UNLV said the program will prepare professionals to meet the sophisticated regulatory and operating challenges facing the gaming industry. Could you detail which challenges you foresee 2022 will bring in that sense?

Before becoming an educator, I spent 37 years working in the industry. My key consideration is to provide an understanding and information that those in the gaming industry can use every day. For example, if every casino manager could spot, report, and remedy every potential regulatory violation, it would be better for career advancement, his employer, and the regulators. Likewise, getting all the interested parties -the regulators, casinos, suppliers, and the public- on the same page as to what the regulatory system is attempting to solve can lead to more focused and innovative solutions to new problems and changing environments. An example is cashless wagering. An industry member that wants to induce regulations to permit cashless wagering is better able to understand and address what the regulators would like to see in a new law and incorporate it in a manner consistent with their business objective. 

There is one course that was included in 2021 and hasn’t been announced for this year, Introduction to Gaming Operations, taught by Uri Clinton. Why is it not included in the initial curriculum? Are there any plans to add it or replace it by a different one in the coming months?

Professor Clinton’s class was not part of the executive development program, but was taught for law students as part of their degree program. We would have loved to have Professor Clinton teach the executive development version of this course, but he recently accepted the top legal position with Boyd Gaming. We were able to convince Bill Buffalo to take on this course for this program. So, we have a wealth of experience to offer the students.

Which role is Entain playing in this new program? Which are the specific contributions from this global operator? 

Entain was very generous in helping sponsor the cost of producing the executive development program. Martin Lycka, Entain’s Senior Vice President, Regulatory Affairs and Responsible Gaming, has been a wonderful resource to help us identify the topics most of concern to the industry and the regulators. This was invaluable in shaping our curriculum.