Bill would force illegal online gaming apps to disgorge profits to Nevada general fund, expand penalties

Senate Bill 256 was presented to the Nevada Senate Judiciary Committee as a measure to strengthen enforcement against illegal online gaming operations and sweepstakes-style sites that accept wagers from Nevada residents.

Senator Rochelle Winn opened the hearing and introduced interns and co-presenters. Janice Wong, legislative intern for Senator Winn, summarized the bill’s three core elements: mandatory disgorgement of profits, elevating certain criminal penalties (including converting some misdemeanors into felonies), and extending liability to operators located outside Nevada who target or accept wagers from Nevada residents.

Darren Dorsey, president and CEO of the Association of Gaming Equipment Manufacturers (AGEM), testified in support and said AGEM and its members work across regulated jurisdictions to combat illegal gaming. He told the committee the bill would add disgorgement as an enforcement tool to the Nevada Gaming Control Board’s powers and that board representatives had been consulted. The Nevada Gaming Control Board later offered neutral testimony and said it would provide information if the committee requested it.

Supporters who spoke in person or by phone included the Nevada Resort Association, the Nevada Council on Problem Gambling (which supports the bill and suggested some disgorged funds be directed to problem‑gambling services), the Vegas Chamber, and other industry groups. Witnesses described the illegal operators as often large, adaptable entities that can switch apps or sites quickly and that disgorgement would give regulators a way to recover ill‑gotten gains beyond statutorily set fines.

Committee members asked practical questions about the scale of illegal revenue and enforcement. Witnesses estimated Nevada‑targeted activity could be in the millions to tens of millions annually and nationally in the hundreds of millions; they noted enforcement challenges because operators can relocate or change platforms quickly. Senator Hansen asked whether "disgorge" has a legal definition; witnesses explained the concept as a tool similar to remedies used by securities regulators to recover ill‑gotten gains. Chair Scheibel and others confirmed the bill as drafted does not change existing criminal penalties but adds disgorgement as an additional remedy.

AGEM and industry witnesses said enforcement actions are typically directed at the companies or operators of apps and sites rather than individual users. No opposition callers or in‑person opponents appeared in the hearing record; the Gaming Control Board provided neutral comment. Supporters urged the committee to consider directing disgorged proceeds toward problem‑gambling resources, a suggestion raised by the Nevada Council on Problem Gambling.

The hearing concluded with supporters thanking the sponsor; the transcript records no committee vote on SB 256 during the hearing.