Disseminator Laws and Legal Requirements in Nevada
Explore how Nevada law defines and regulates disseminators, including licensing, oversight, and legal consequences for noncompliance.
Nevada has established specific legal requirements for individuals and entities distributing certain information, particularly within the state’s vital gaming industry. These regulations aim to ensure transparency and integrity. Compliance is crucial to avoid significant penalties.
This article outlines Nevada’s disseminator laws, detailing who qualifies as a disseminator, the licensing process, regulatory supervision, and potential legal consequences for violations.
Scope of Disseminator Classification
Under Nevada law, specifically Nevada Revised Statutes section 463.0147, a “disseminator” is defined as someone who provides information about horse racing or other racing events to licensed gaming operators.1Nevada Revised Statutes. NRS 463.0147 “Disseminator” Defined
The key factor is how this information is used: it must be employed by a licensed race book, sports pool, or gambling game operator to determine wager outcomes or payoffs. Providing data directly used for settling bets places the supplier within this legal definition. Nevada Gaming Commission Regulation 22.080 generally requires licensed race books to use information from licensed disseminators for determining winners and payouts in races.2Nevada Gaming Commission. Regulation 22 – Race Books and Sports Pools
State law explicitly excludes entities that offer televised broadcasts free of charge to the general public. The focus remains on those commercially supplying specialized, outcome-determinative racing data directly to licensed gaming businesses.
Licensing Requirements
Operating as a disseminator in Nevada legally requires obtaining a license from the Nevada Gaming Commission. State law, under section 463.430, prohibits acting as a disseminator without this license, reflecting Nevada’s policy of tightly controlling gaming-related activities.3Nevada Revised Statutes. NRS 463.430 Disseminator Must Be Licensed
Securing a license involves an application and investigation overseen by the Nevada Gaming Control Board and decided by the Commission. Applications, similar to those for nonrestricted gaming licenses, require comprehensive personal and business details submitted on specific forms provided by the Board.4Nevada Gaming Control Board. Application for Disseminator License
A critical part of the process is a thorough background investigation conducted by the Board’s Investigations Division, as required by section 463.210. This review assesses the applicant’s financial stability, integrity, and background to ensure suitability. Applicants must cover all investigation costs, which include an initial application fee ($1,000 per applicant/entity) and subsequent charges for investigators’ time and expenses.5Nevada Gaming Control Board. License Fees and Tax Rate Schedule A deposit covering estimated costs is required upfront.
After its investigation, the Board recommends approval or denial to the Commission (section 463.210), which makes the final licensing decision, potentially after further review or hearings (section 463.220).
Regulatory Oversight
Licensed disseminators operate under the continuous supervision of Nevada’s primary gaming regulators: the Nevada Gaming Control Board and the Nevada Gaming Commission. This structure, established by the Gaming Control Act (NRS Chapter 463), ensures licensees adhere to state policies emphasizing honesty and integrity. The Board serves as the day-to-day administrator and enforcement body, while the Commission holds ultimate authority over licensing and regulations.
The Board possesses broad powers under section 463.1405 to monitor licensees, ensuring their ongoing suitability and proper operations. Board agents can inspect premises, examine equipment, and audit records related to the disseminator’s activities and finances (section 463.140).6Nevada Revised Statutes. NRS 463.140 General Powers and Duties of Board and Commission
If the Board suspects violations, it can investigate and file a formal complaint with the Commission (section 463.310), acting as the investigator and prosecutor in disciplinary cases outlined in Commission Regulation 7.7Nevada Revised Statutes. NRS 463.310 Investigations and Initiation of Complaints by Board The Board may also issue less formal actions for conduct violations.
The Commission acts as the final judge in regulatory matters. It reviews Board complaints, holds hearings, and imposes disciplinary actions if violations are confirmed (section 463.310). The Commission also adopts and amends the gaming regulations that govern disseminators and the broader industry, ensuring the rules adapt while upholding state objectives.
Potential Criminal Liability
Operating as a disseminator in Nevada without the necessary license can lead to serious criminal charges. Nevada Revised Statutes section 463.430 explicitly forbids acting as a disseminator without a valid license from the Gaming Commission.
Violating state gaming laws where no specific penalty is defined typically constitutes a gross misdemeanor under section 463.360(6).8Nevada Revised Statutes. NRS 463.360 Penalties A gross misdemeanor conviction in Nevada, according to section 193.140, can result in up to 364 days in county jail, a fine up to $2,000, or both.9Nevada Revised Statutes. NRS 193.140 Punishment for Gross Misdemeanors
However, section 463.480 specifically addresses violations related to disseminator provisions (sections 463.430 to 463.460), classifying them as a category C felony.10Nevada Revised Statutes. NRS 463.480 Penalty Under section 193.130, this carries a potential state prison sentence of 1 to 5 years and a possible fine up to $10,000, indicating stricter penalties for unlicensed dissemination.
Criminal liability can extend beyond licensing. Intentionally providing false information used to settle wagers could potentially constitute cheating under section 465.083.11Nevada Revised Statutes. NRS 465.083 Cheating Cheating at a gambling game is generally a category B felony (section 465.088), punishable by 1 to 6 years in prison and a fine up to $10,000 for a first offense (section 193.130). Willfully failing to pay required license fees or taxes can also result in felony charges, specifically a category C felony under section 463.360(2).
Civil Lawsuits and Remedies
Disseminators in Nevada may face civil lawsuits arising from contractual disputes or the accuracy of the information they provide. Licensed gaming operators depend on disseminator data for settling bets. If a disseminator breaches a contract—for instance, by providing inaccurate or untimely information—the affected operator could sue for monetary damages based on standard contract law.
Disseminators might also face civil liability for negligence. If inaccurate information provided due to carelessness causes financial harm to an operator (such as incorrect payouts), the operator could file a negligence lawsuit. Such a claim would require proving a duty of care was owed and breached, directly causing damages.
While patrons can sue licensees for cheating under section 463.361, the law does not explicitly provide a direct path for patrons to sue disseminators solely for providing incorrect information to a licensee. Disputes between patrons and licensees over winnings or game conduct are typically handled through an administrative process involving the Nevada Gaming Control Board, as detailed in section 463.362.12Nevada Revised Statutes. NRS 463.362 Resolution of Disputes Between Patron and Licensee This process allows for Board investigation and determination, with potential for judicial review (section 463.3662), but primarily addresses patron-licensee conflicts.
Remedies in civil suits against disseminators usually involve monetary damages to compensate for losses. In some cases, courts might grant equitable relief, such as an injunction, to prevent ongoing harm. While regulatory bodies oversee licensing, their direct involvement in private civil suits is limited, though their findings might be used as evidence. The Board itself has the authority under section 463.142 to initiate civil actions against licensees, including disseminators, to collect unpaid fees, taxes, or penalties.
