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Nevada may clamp relationships between casinos and Net12 March 2010
By Howard Stutz
LAS VEGAS, Nevada -- Nevada gaming regulators may clamp down on contractual relationships between the state's casino operators and nongambling arms of the Internet gaming industry.
The move, which the Gaming Control Board is exploring, could shut off revenue streams for the World Series of Poker and other similar events.
Several years ago, the World Series Poker, which is owned by Harrah's Entertainment, set self-imposed guidelines prohibiting online gamblers from qualifying to the tournament through the Internet. The move reduced the number of entries into the tournament's $10,000 buy-in main event by more than 27 percent from its peak year.
The World Series of Poker, which 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.
Last month, The Venetian held the inaugural event of the newly created North American Poker Tour, which is sponsored by PokerStars.net. In the $5,000 buy-in event that was taped for airing on ESPN2 next month, 872 players entered, including 25 who qualified through PokerStars.net.
Taping concluded last weekend at Caesars Palace for the National Heads-Up Poker Championship, which will air on NBC next month. The event did not have an online poker sponsor but a related televised poker event, Face the Ace, which aired in August, was filmed in several Las Vegas casinos and sponsored by FullTilt.net.
Gaming Control Board member Randall Sayre said he is drafting a letter to the casino industry that sets guidelines for entering into deals with Internet gaming businesses.
"We don't have a policy and clearly the board needs to boil down exactly what that policy needs to be," Sayre said. "Some gaming licensees play carefully by the rules and others do not. I do not believe the board can remain silent on this any longer."
Veteran gaming attorney Frank Schreck agreed that the control board needs to set rules for dealing with Internet gaming businesses. He said responsibility for complying with regulations falls on the casinos.
"There is a lot of confusion right now in the industry and there needs to be some regulatory guidelines," Schreck said. "All we're asking is to tell us what is permissible."
Technically, it is illegal for Internet gaming Web sites, which are incorporated and located outside of the borders of the United States, to accept wagers from Americans. In the 2006, the Unlawful Internet Gaming Enforcement Act became law which made it a crime for banks and other financial institutions to process transactions used in online gaming.
Several Web sites, including PokerStars and FullTilt, created two Internet portals. One location is designated as a .com and accepts 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.
"Oftentimes, there is very little difference between the dot-nets and dot-coms," Sayre said. "This is something that has been tolerated but the board needs to ask itself if this relationship is reasonable."
Use of the .net poker sites have become commonplace.
Players participating in televised poker events often sign sponsorship deals to wear hats and shirts with the logos advertising the .nets. Harrah's set guidelines for players' use of the logos worn during the World Series of Poker, such as size, frequency and prominence. Logos for the .coms are banned.
A television advertisement for PokerStars.net featuring professional poker player Daniel Negreanu, airs regularly during NBC's coverage of the National Hockey League and appeared often during the network's recent coverage of the Winter Olympics in Vancouver, British Columbia.
"The relationships between the dot-coms and dot-nets have migrated into something different," Sayre said. "The board needs to take a hard stand as to what is suitable and what is not suitable."
Harrah's, through its interactive entertainment division, has business deals for three online gaming sites in the United Kingdom, including one for the World Series of Poker. None of sites can be accessed by Americans.
The company was unsure how the control board's planned actions could affect that business.
"We don't deal in hypotheticals or what-ifs so we won't comment on anything that may or may not occur," Harrah's Interactive Division spokesman Seth Palansky said.
Internet poker is credited with fueling the growth in the World Series of Poker, which had 839 entries in the world championship main event in 2003 when Chris Moneymaker won the title. A year later, main-event entries grew to 2,576.
When Jamie Gold won a record $12 million prize in 2006, entries topped out at 8,773. In the past three years, since Harrah's stopped players from gaining entry to the tournament online, the field for the world championship has averaged 6,500 players.
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Nevada may clamp relationships between casinos and Net is republished from Online.CasinoCity.com.