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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Casino licensees told to stay clear of Internet gambling companies

4 June 2010

LAS VEGAS, Nevada -- A member of the Gaming Control Board said casino licensees should continue to keep their distance from Internet gambling companies that accept wagers from Americans.

The Nevada agency will continue to look at any ongoing relationships on a case-by-case basis.

In letter posted Wednesday on the agency's website, control board member Randall Sayre told an unidentified gaming attorney that his advice to clients about not doing business with certain Internet gaming operators was "sound from both a state and federal perspective."

The letter was in response to a question surrounding the distinction between .com and .net websites operated by Internet gaming companies. The companies often create two portals, with the .com site accepting wagers. The second site, designated by .net, does not accept wagers and serves as an introductory and tutoring location for potential gamblers.

However, the .com locations are easily accessed through the .nets.

Sayre agreed that the distinction between the two sites has become blurred. Internet gaming companies that accept wagers from Americans and enter into business relationships with Nevada's nonrestricted gaming licensees are "inconsistent with the Nevada Gaming Control Act and regulations promulgated pursuant to that Act."

Sayre said any current business relationships are being explored by the regulatory agency.

"Those activities that require board review and approval are being looked at more closely so that determinations can be made as to whether business relationships between Nevada licensees and Internet-based companies violate state and federal law/regulations," Sayre wrote.

Technically, it is illegal for Internet gaming websites, which are incorporated and based outside of the United States, to accept wagers from Americans. In 2006, the Unlawful Internet Gaming Enforcement Act was enacted, making it a crime for banks and other financial institutions to process transactions used in online gaming.

While the potential legalization of Internet gaming has surfaced in Washington, D.C., and the American Gaming Association now believes technology exists to allow the activity to be regulated at the state or federal level, nothing has changed.

Sayre said the U.S. Department of Justice has not shown any indication it plans to relax its position that Internet gaming is illegal.

"The lack of federal criminal prosecutions under (the act) should not be interpreted by the gaming industry as a lack of interest by state and federal law enforcement and regulatory agencies on this issue," Sayre wrote.

Questions about the business relationships arose after two poker events earlier this year on the Strip.

In February, The Venetian held the inaugural event of the North American Poker Tour, which is sponsored by PokerStars.net. In the $5,000 buy-in event, 872 players entered, including 25 who qualified through PokerStars.net.

In March, Caesars Palace hosted the National Heads-Up Poker Championship. The event did not have an online poker sponsor but a related televised poker event, "Face the Ace," was filmed in several Las Vegas casinos and sponsored by FullTilt.net.

The World Series of Poker, which began last week and is televised throughout the year by ESPN, is in the second year of a sponsorship deal with Everest Poker, an online gaming site whose logo is placed on tournament gaming tables. Everest Poker, which is based in Malta, does not accept wagers from Americans.

Gaming regulators are currently investigating the suitability of 888, an online gaming company based in Gibraltar that is providing software for Harrah's Entertainment to manage three Internet gambling sites in the United Kingdom, which do not accept wagers from Americans.

The issue marks the first time Nevada regulators are investigating the suitability of an online gaming company that accepted wagers from Americans before the act's 2006 adoption.
Casino licensees told to stay clear of Internet gambling companies is republished from Online.CasinoCity.com.