Sources confirmed to ESPN that McGregor arrived in Las Vegas on Monday evening. Mayweather lives and trains in Las Vegas.
Nevada State Athletic Commission chairman Anthony Marnell confirmed to ESPN that the commission has been made aware of active negotiations between the two camps, but said the fight still faces several challenges.
"There is a lot of real stuff going on," Marnell said Tuesday. "It still seems like a long shot, but when there is a lot of money involved, people tend to figure it out. There are a lot of cooks in the kitchen, but I'm not sure if we're going to eat.
"The Nevada Athletic Commission, in my experience, has always been well-briefed by all parties on an event or potential event that may take place in Las Vegas. We are aware of conversations and information that has been disclosed and not disclosed in the media. Whether these conversations will get to a point that a fight happens, I can't tell you."
Mayweather spoke to Smith at the NBA game Saturday between theGolden State WarriorsandOklahoma City Thunder. Smith said Mayweather believes the fight will happen, but Mayweathersaid nothing is guaranteed until a deal is done.
The two sides have gone back and forth in the headlines for nearly a year, regarding a potential fight.
McGregor, 28, is the UFC's lightweight champion and remains under contract. Marnell mentioned that as a wrinkle in any boxing match McGregor wishes to pursue, saying, "people are under certain contractual obligations that need to get figured out."
McGregor successfully applied for a boxing license in California in December. He has never boxed professionally. Mayweather, 39, is regarded as one of the best boxers of his era.
Last month, UFC president Dana White publicly offered McGregor and Mayweather $25 million each for the potential boxing match. When told of White's offer by TMZ, Mayweather said, "He's a f---ing comedian!"
McGregor has demanded $100 million for the fight and said he'd be willing to do it with or without the UFC's involvement. White has promised that won't go well for the star fighter.
"It is what it is now," White told ESPN last week. "He came out and said, 'I can do this without them.' I guarantee you, he can't do it without us. What I then said was, 'I've always been respectful of Conor, the things he wants to do and everything else. If he wants to go down that road it will be an epic fall.' Everybody knows exactly what that means."
According to Marnell, as expected, the distribution of money from this potential megafight might be the biggest hurdle of all.
"I'm confirming that real people are having real discussions," Marnell said. "I'm also telling you my opinion as the Nevada Athletic Commission chairman that a lot of things need to get done in order to see something like this come together because there are so many parties that want to get their hands on the pot.
"Maybe it will get figured out, but it's going to be hard when everyone is declaring they want $100 million. That's not what I said -- that's what they've said. That's their quotes, not mine. If everyone wants $100 million, that's a lot of $100 millions to go around."
Mayweather-McGregor fight not a done deal yet
Brett Okamoto reports the latest on the possibility of a fight between Floyd Mayweather and Conor McGregor.