Nevada's Gaming Authority Bans PropSwap, a Platform for Sports Betting Ticket Trading
Once more, the Nevada Gaming Control Board (NGCB) has turned down PropSwap and the idea of permitting companies to mediate the trading of sports bets.
On Thursday, the NGCB decided to drop a proposed addition to Regulation 5.240, creating a new classification of service provider in Nevada's lawful sports gambling sector.
PropSwap, Inc., a Chicago-based company, requested the regulatory agency create a "betting ticket resale service provider" category and deem it eligible to run an online marketplace for buying and selling sports betting tickets.
The three-member NGCB on Thursday raised numerous concerns when deciding against the new sports wagering licensing classification. NGCB Chair Kirk Hendrick, who was appointed to the position in January 2023 by Gov. Joe Lombardo (R), revealed he would support reconsidering the matter later on but for now, the regulatory amendment is unwarranted.
Board Decisions
Hendrick expressed that such an acceptance might prompt more sports ticket exchange ventures to seek entrance into the state, which isn't desired or dictated by the state at the moment.
"I'm a devotee of new principles and entrepreneurship ... but I have several apprehensions about this activity in Nevada. Is this something the Nevada gaming business calls for, and do Nevadans calling for and wanting this?" Hendrick inquired.
PropSwap operates in more than 20 states. The company permits sports bettors to sell a wager that is still undetermined for money early on.
For instance, a bettor who risked $100 before the NFL season began on the Cleveland Browns to win the Super Bowl at 40/1 odds might sell the wager before the game that the Browns unexpectedly reached. The initial bettor is ensured a win, and the new bettor's prospective payout is better than what sportbooks offered after the Browns' line shrank due to the team's playoff run.
PropSwap imposes a 10% commission on the sale price. The platform also charges a 3% charge on account deposits.
NGCB members voiced concerns regarding how the exchange could be used for money laundering and expressed worries about PropSwap not having the same KYC (Know Your Customer) safeguards as the state gaming industry mandates of its licensees.
PropSwap's attorney, Marc Rubinstein, argued that it's much more complex to launder money digitally than with cash. He explained only credit cards, debit cards, and bank transfers are permitted, which creates a straightforward financial trail.
Hendrick questioned if there's sufficient demand to warrant issuing licenses and regulations for sports betting ticket exchanges. Most bettors who possess a futures bet that looks promising often insure their bet to guarantee a net settlement.
"Why wouldn't Nevada licensees handle this themselves?" Hendrick asked.
Rubenstein replied that there might not be sufficient "juice" for sportsbooks to manage the added costs of facilitating the ticket exchanges among bettors. Rubenstein explained the business viability shouldn't factor into the NGCB's decision.
"This is a question of business wisdom," the attorney defended. "If the casinos felt it would be in their best interests, they would do it themselves."
PropSwap Operations
According to the company's website, PropSwap is functional in 23 states, including Arizona, Arkansas, California, Colorado, Georgia, Connecticut, Florida, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Mississippi, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and West Virginia.
Some of those states have given PropSwap a distinct sports gambling license, but many have decided that a gaming concession isn't necessary because no new bets are created on the platform.
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Source: www.casino.org
