Nevada gaming regulators have raised the question of whether sports data services should require a license to serve sportsbooks in the state.
As the online sports betting industry has grown and evolved in the U.S., so has the role of companies who partner with sportsbooks (as well as sports leagues and other entities) to supply historical and real-time data that is often used by gaming operators for their betting lines and markets. In many states these companies require supplier licenses to work with operators in the state.
At a meeting on Dec. 12, the Nevada Gaming Control Board discussed whether such companies should be required to register with state regulators. Board Chairman Kirk Hendrick asked whether the board has “enough visibility and knowledge” of all parties involved in providing data and setting betting lines for sports events.
Hendrick asked for opinions on whether a new category of service provider should be created specifically for these types of firms. Jim Barbee, chief of the board’s technology division, named Genius Sports, Sportradar and LSports as the types of company who may be required to register under the proposal. The regulatory discussion would not include organizations like the NBA which publish data themselves that is not primarily used for the purposes of wagering.
Changes to betting industry prompted discussion
Barbee noted that the board previously held workshops on the topic back in 2022. He explained the conversation started based on the notion that the Nevada sports betting regulatory and statutory environment was created for a market with far fewer players in the industry. Since then, he said, the market has evolved significantly, both on a broad level with more online betting taking place than ever before and also through the proliferation of live data-based betting.
Barbee suggested that what he called “sports data service providers” exist between the betting event itself and the information service which monitors events and creates betting lines etc. He noted that while information services get their data from third parties, data services “are a little closer to the actual event” as they monitor events themselves.
Ultimately, the proposal would be to regulate data service providers as well as the already regulated operators and information services. Barbee and Hendrick both noted that similar requirements are already in place in other jurisdictions such as New Jersey, which considers data firms to be “ancillary” parties.
Visibility and accountability are key, say board leaders
It’s about transparency and accountability, said Hendrick, as well as increasing the opportunity for Nevada regulators to take a hands-on role in reviewing any issues that may arise with data firms.
“It also gives us the authority and tools on the back end that, should something go wrong, we can work directly with those third parties,” Barbee added. “As it stands now, our visibility stops at the information service.”
Barbee offered a hypothetical scenario of an error with a betting line or event. If that happened today and the information service claimed its provider had a hitch with its product, he said, the third party does not have to explain itself to the board. “We’re limited in conducting a full investigation,” he noted.
Is there a real need?
However, board member George Assad questioned how necessary regulating sports data providers really is given that Nevada already oversees sportsbooks and information providers.
“We have a lot of regulations already. Do we really need another regulation when we can go after the [information provider] Stadium Technology or the licensee, for example, MGM or Station [Casinos] or Wynn? … I just don’t see the point.”
Barbee noted that the board has seen examples in the past where third-party sports data providers have had an impact on gaming operations by affecting opening betting lines or other operational decisions. “We don’t have the ability to look under their hood to see what’s going on there …” he stressed. “We simply don’t have any oversight or insight into what they’re doing or how they do it.”
Hendrick concluded the discussion by noting that the board will consider several factors when deciding whether or not to draft legislation on the topic. No action was taken at the meeting.
