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Entity wagering in Nevada gains momentum and could spoil your sports betting fun – Part II




In the final part of this series on Entity Wagering, Glenn looks at the nuts and bolts of this new wagering concept in Nevada.

In the first part of this two-part examination of Entity Wagering I hoped to better define the concept and took a strong stand against it. "Entity" is a manufactured word here meaning a mutual fund joining a group of bettors together to make one large bet or series of bets to gain a market advantage. Accumulated together to produce an ongoing investment dividend or payoff. What makes this concept really different is asking whether we're traditionally judging the results of a company's sales performance and current market value versus the performance of handicapping wagering on sporting events. HUGE DIFFERENCE number one. And there are plenty of others.

Questions We Need to Know First

Basically, the vigorish, vig or "juice" on a sample bet is 10%. It has been reported by many start-up entity wagering companies already receiving their license in Nevada to also include proposition and various in-game wagers into the mix, which often have vig over 10%. Doesn't this affect "fund" performance and overall a high cost within an investment?

entity wagering in NevadaAll experienced bettors know that to achieve a threshold of profit they need to achieve at least a 56% straight-up win percentage to break even. Getting into the 60%+ range is very healthy and a premium goal. Will experts at each fund know which specific bets to maximize performance levels and will bettors be comfortable how money (wagers) are distributed?

As written in Nevada State Senate Bill 443, the entity must disclose each and every bet to its investors BUT only after each wagered on each event begins. In other words, bettors WILL NOT be getting a text or email two hours before each game or even two minutes prior alerting them. Therefore, if a bettor might be thinking of "backing up" the entity's suggested bets with one of their favorite preferred offshore sportsbooks online, they will not have the opportunity.

There will be some "modest fees" incurred to run the entity, but they have not been disclosed as yet. Are bettors/investors acceptable with that? As yet, no one has ever charged money to place a bet. Only the cost of potentially losing it (10%+).
The new companies or funds have talked positively of investors being paid quarterly. It is difficult to forecast because not one bet has not been taken as yet. Forecasting the brightest results, are bettors (investors) who are used to being paid daily or weekly, willing to wait three months to be rewarded? Like so many other questions, it remains to be seen.

CG Technology compared to a Draft Kings or Fan Duel

CG technology entity wageringCG Technology, a very respected company known formerly known as Cantor Gaming was heavily involved in helping to write the language putting the entity wagering bill together. They own eight sportsbooks themselves in Las Vegas. In being the initiator and first in business, they are taking the leadership role and likely will be the leader in entity wagering's infancy. But unlike Daily Fantasy Wagering giants Fan Duel & Draft Kings, they welcome competition to increase liquidity, acceptance of the new concept and opportunity to better spread the large wagers around various Nevada sportsbooks. To become a CG Entity Wagering Account regulations are quite extensive and align similar to many traditional mutual funds.

There's also a huge difference between fantasy wagering and traditional sports wagering in the current muddled legal system. We may be forever in the courts battling and defining the key issue, the legal definition between the words skill and luck. But to me, it is and will always be down to one much, much more important word: RISK.

And speaking of risk, it's still a bit grey how much money can one specific "investor" put into a fund to own or control a high percentage without having any say upon their investment. Are there any limitations? At least in daily fantasy wagering, a player is free to pick their own players in submitting their daily entries. This concept could be a boost for fantasy wagering in bragging thousands of individual people are in control of their own minor investment. And raise a worry again toward the four major sports leagues concern about integrity. Just sayin'.

Effects on Offshore Wagering

The golden dream here is for selling people across the USA they always have a safe, legal wagering investment in the game in the only state where it is truly legal...Nevada. That is, assuming the U.S. Third Circuit Court of Appeals again denies New Jersey their appeal for legal sports wagering from last February. Their other proposition is making bettors feel they have a "no-risk, no-fear" wager on sports compared to making a bet "privately" or among the list of established offshore sportsbook operators. No risk in proclaiming their wagers are legal and safe, but also subject to income and tax laws as any other investment opportunity.

Then again, could that even help a Bovada, Diamond Sports or BetOnline? Or maybe a selling point for your guy on the street? While there is some viable upside to this novel new concept, again add up the big baggage the average bettor will be accumulating including the last huge one:

• As investment income, you will be LEGALLY required to include your winnings in your state and federal taxes. Ugh.
• You will not know the nature of the entity's bets until they are in-play and have no say whatsoever in their selection.
• You will be paying some fee to be part of the entity and will likely be paid quarterly IF the entity (fund) shows a positive performance. There likely will be restrictions or penalties for early withdrawal.

Also, the entire entity wagering concept could come crashing down if one or many zealous politicians outside of Nevada want to potentially choose to invoke the federal law PASPA in the near future (Professional and Sports Protection Act). It is not likely. That is the primary reason why we're not counting on betting the Monday Night Football opener in Newark or Atlantic City, New Jersey this year or next. The jury is out but these could be among several compelling reasons why, although legal in Nevada, it's been moving rather slowly in acceptance.

Super Idea

If you must bet something from afar in Las Vegas there's still the NFL SuperContest at the Westgate to look into. The original "fantasy sports" contest. Last year a pool of about 1,500 vied for a prize pool of over $2,000,000. First place took home over $900K. The potential good news is YOU get to select your teams each Sunday for 17 weeks. The bad news is you have to be on-site in Vegas to do it. Or pay someone. But basically you are in control and will know five days or five minutes before kickoff what's at stake and what the line is. And not have to worry which book is going to accept your bet or not or lay it off. Completely different concept but still a lot of fun.

Maybe I'm old school but notice I used the word "bet", NOT INVESTMENT.

Glenn Greene covers the games from a betting angle every week exclusively at OSGA.com. For weekly betting insights, inlcuding previews and picks from Glenn, click here.