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Equity firm sports betting bill dies in Nevada

Sandra Chereb, Associated Press

CARSON CITY, Nev. (AP) -- A plan to allow private equity firms to wager chunks of cash at casino sports books was scratched by Nevada lawmakers, along with a measure to make federal election outcomes moneymaking fodder for oddsmakers.

Both measures died Friday when they failed to make it out of committees.

SB346, sponsored by Sen. Greg Brower, R-Reno, ran into trouble when the chairman of the Nevada Gaming Control Board raised red flags over how hedge funds and other private equity groups would be regulated.

"As hard as the team was working, I guess they couldn't get everybody on board," Brower said Monday. "I think it is an idea that has a lot of merit."

Under existing law, only individuals can place bets. It's also illegal to pay someone else to place a bet for you — a practice known as "messenger betting."

Nevada holds a monopoly on sports wagering under a 1992 federal law, though that's come under fire by other states, including Nevada's East Coast gambling rival New Jersey.

Brower's bill sought to position Nevada to capitalize on some of the estimated $380 billion bet illegally on sports each year in the U.S.

He described it as a "novel concept" that would help the Silver State become more competitive for gambling dollars around the world.

But during testimony earlier this month, Gaming Control Board Chairman AG Burnett said the proposal caused serious heartburn for regulators. He said the concept of "entity" wagering appeared to be an attempt to allow hedge funds and other big investment firms to gamble on behalf of investors.

Burnett said if all participants, investors and operators were located in Nevada, the regulatory task would be manageable. But he questioned how long his agency's regulatory arm could extend, if, for example, Goldman Sachs or Bain Capital opted to set up a separate entity to bet on sports. Would all investors be subject to suitability determinations?

Another concern was the wiring of money to place bets.

"How that complies with federal law, the Gaming Control Board is not sure," he testified.

"We don't object to new methods and modes to enhance the sports betting business in the state," Burnett said. "Be we have to do it carefully and we have to make sure it's legal so that state doesn't get embarrassed."

As for betting on federal elections, that, too, fell to the legislation scrap heap.

SB418, introduced by the Senate Judiciary Committee, would allow pari-mutuel wagering on elections for president, U.S. Senate and the House of Representatives.

Judiciary Chairman Tick Segerblom, D-Las Vegas, said election betting could be a boon for state gambling revenues.

He argued, to no avail, that other countries allow wagers on elections and Nevada should "think outside the box."