New Jersey takes in 3x more revenue through sports apps than Nevada

Sightline, a Nevada gaming licensee wants to convince regulators to loosen the rules for gamblers who want to wager on sports apps, scrapping the rule requiring in-person identification verification.

That’s a change that could potentially boost sports betting revenue in the Silver State, as well as further promote the use of cashless technology in gambling.

New Jersey Beats Nevada Hands Down in Sports Apps Revenue

New Jersey sportsbooks raked in $66.4 million from sports apps in December, a 125.6% increase year-over-year. While Nevada hasn’t released its December totals from sports apps yet, the November total was $23.5 million, less than half of New Jersey’s.

Of course, much of that difference is due to the fact that New Jersey has 9 million residents compared to Nevada’s 3 million. Moreover, New Jersey has hundreds of thousands of sports bettors from neighboring New York; a quick drive over the border allows New Yorkers to access sports apps and online casino games in the Garden State.

In-person Registration a Thing of the Past

Some of the revenue difference is also because it’s much easier for gamblers to create a mobile gambling account in New Jersey, since Nevada’s regulations require players to show up in person at a sportsbook to confirm the player’s identity. In New Jersey, the verification process can be completed online.

Las Vegas-based Sightline Payments LLC, a financial transaction provider of cashless gaming solutions, is working to change that rule. Sightline has submitted a petition in September to Nevada’s gaming regulators to amend the rules requiring in-person ID verification. The issue is on the roster for the commission’s next meeting.

“Cashless solutions have proliferated across online shopping, e-commerce, and banking, becoming a preferred method of transaction between consumers and businesses,” noted Jennifer Carleton, an attorney representing Sightline, in the petition presented to the commission.“Cashless transactions are quickly replacing traditional cash-based payment methods and the transition has been further accelerated by the global pandemic.” 

While allowing for more cashless transactions is the end benefit for Sightline, eliminating the restriction on digital account verification will also help the state, possibly increasing the state’s tax revenue on sports apps.

American Gaming Association backs cashless technology

Among the top initiatives endorsed by the American Gaming Association is the development of more cashless solutions for online casinos and sports apps.

“Advancing the opportunities for digital payments has been a top priority since my first day at the AGA,” said Bill Miller, president, and CEO of the American Gaming Association. “It aligns with gambling’s role as a 21st-century industry, bolstering our already stringent regulatory and responsible gambling measures. The COVID-19 restrictions made it even more important for us to increase our efforts to provide customers with a payment choice they’re more comfortable with and have increasingly come to expect in their lives.” 

Cashless Gambling has Many Benefits

Advocates of responsible gaming point out that cashless payment systems can be programmed to place a limit on a player’s spending. Also, with a digital record of the gambling transactions, law enforcement can more accurately identify money laundering by analyzing the payments.

Currently, Nevada’s regulatory framework has two sets of rules for gambling accounts. Interactive gaming, including all authorized games, is covered in Regulation 5A. Sports betting, which includes racing and sports is covered in Regulation 5. Both regulations cover deposits, withdrawals, credit, and debits.

The biggest difference between the two is that Regulation 5A allows for remote identification verification, but Regulation 5, which includes sports apps, doesn’t.

“To establish an interactive gaming account under Regulation 5A, an operator can register someone as an authorized player and verify that information remotely,” Carleton pointed out in the petition. “Currently, regulation 5A allows for an operator to use digital (knowledge-based authentication) tools to verify a person’s self-reported information after they have opened an interactive gaming account.”

What is Knowledge-based Authentication?

Knowledge-based authentication involves a series of personal questions, such as “What was the street you lived on when you were 18 years old?” In-person verification can also involve producing utility bills to their home address.

“We request that Regulation 5 be amended to allow for digital Knowledge-Based Authentification of a player’s sports betting account information, similar to the current digital verification process for interactive gaming accounts established and utilized by licensees under Regulation 5A,” said Carleton.

However, according to Brin Gibson, Nevada Gaming Control Board Chairman, that argument isn’t simple.

That’s because many casino licensees, especially those with retail sportsbooks, oppose allowing remote registration. The casinos argue that some prospective sports apps seeking to access the Nevada market have little to no investment in the state’s brick-and-mortar sportsbooks and casinos. 

The Importance of Brick-and-mortar Investment in Nevada

While critics say that the retail sportsbooks want to keep in-person sign-ups, because it also attracts gamblers to play on the slot machines when they come to sign up for a sports app account, Gibson points out that he hasn’t seen the data suggesting that the retail sportsbooks get significant revenue from that.

Gibson thinks the opposition is more about the casinos investing millions of dollars in their retail sportsbooks only to have small, out-of-state sports app companies enter the market without making an investment in Nevada.

“Some licensees feel very passionate about their investment in brick and mortar and that’s a huge challenge,” said Gibson. “The realities of the gambling industry are unique in Nevada since we have so much brick and mortar.”

 

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