In Nevada, the United States Securities And Exchange Commission regulator has subpoenaed at least three companies involved with entity wagering funds demanding to know the identities of their investors along with information concerning the firms’ advertising and marketing practices.
According to a report from Legal Sports Report, the subpoenas from the federal agency’s Atlanta office were sent on Monday to at least three as yet unnamed entities and additionally seek all correspondence the concerned parties may have had with partners, regulators and officials.
Last year saw Nevada enact legislation known as SB443 that allowed entity wagering funds to operate while Las Vegas-based sportsbook operator CG Technology became the first and so far only licensed firm in February. Managed in the style of a mutual fund by professional sports bettors, these operations source investment from across the globe before wagering this money on the outcome of sporting events with the aim of bringing in consistent and long-term growth.
Legal Sports Report explained that CG Technology, which has relationships with at least seven entity wagering funds, helped to develop SB443 and also lobbied hard for its passage. It reported that it remains unclear whether the sportsbook operator or Bank Of Nevada, which is the sole financial institution currently offering services to the western state’s entity wagering funds, have been named in the subpoenas.
July saw CG Technology pay a $1.5 million fine to the Nevada Gaming Control Board and force its Chief Executive Officer, Lee Amaitis, to resign in order to resolve a complaint concerning underpayments on its computerized sportsbetting system while it shelled out $22.5 million three months later due to its alleged involvement in a money laundering and illegal gambling operation.
Legal Sports Report declared that the subpoenas, which must be satisfied within two weeks, appear to be an attempt by the United States Securities And Exchange Commission to familiarize itself with the entire industry rather than to bring charges against a particular operator. The actions include no accusations of wrongdoing while it remains unclear whether the regulator even holds any jurisdiction over entity wagering funds.
Legal Sports Report stated that Nevada’s entity wagering funds are not registered with the United States Securities And Exchange Commission as the federal Investment Act exempts any investment vehicle that has less than 100 backers or fewer than 500 with total assets below $10 million over three fiscal years. It reported that recent estimates have put the current amount of cash speculated on such Nevada operations at around $2 million with investors numbering in the low hundreds.