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State gaming regulators Wednesday granted Michael Gaughan's Las Vegas casino tentative approval to operate an online poker website accessible only within Nevada boundaries.
South Point attorney Steve Harris told the Gaming Control Board in Carson City the technology to run the Internet poker website is in advanced stages of approval by an independent testing laboratory hired by gaming regulators.
If all conditions are met, Harris said the South Point's website could begin accepting wagers over the Internet on a test basis by October. However, the control board placed several stipulations on the interactive gaming license to ensure all state requirements are met before the website goes live.
Nevada gaming regulators already have approved three gaming equipment manufacturers to provide casinos with the technology for interactive gaming.
More than three dozen casino operators and gaming equipment manufacturers have applied for interactive gaming licenses in Nevada.
The South Point was the first in line and, if approved by the Nevada Gaming Commission on Aug. 23, would be the first casino operator licensed.
Some analysts have questioned the potential of online poker in Nevada because the activity would be limited to players in the state, which has a relatively small population.
Other states, including California, Delaware, New Jersey and Iowa, have explored the potential of legalizing online poker.
Most major companies in the casino industry advocate that Congress legalize Internet poker on a federal level.
Caesars Entertainment Corp. Chairman Gary Loveman, whose company owns the World Series of Poker, said during an quarterly earnings conference call Monday that his focus is now on a state-by-state effort because of congressional inaction.
The control board Wednesday took less than 45 minutes to recommend the South Point. Gaughan attended the hearing, but did not speak and was not questioned by gaming regulators. Harris said Gaughan was the first casino operator to embrace the idea of online gaming in Nevada, and his casino has been operating a free play online poker website since last year.
The South Point acquired its own interactive gaming system and has a patent pending for the technology. The casino was also recommended by the control board for a license as a manufacturer.
Also on Wednesday, the control board granted temporary approval for owners of the Monarch Casino and Resort Inc., parent of the Atlantis in Reno, to operate an online poker website. However, the casino doesn't have an agreement with a technology company and is not close to launching a website.
Gaming Control Board Chairman Mark Lipparelli said that because South Point is the trailblazer, regulators wants to ensure all the safeguards and system protocols are in place before the website launches.
Lawrence Vaughan, chief operating officer of South Point Poker who developed the website's technology, told the control board the system has safeguards to ensure players are at least 21, are physically in Nevada and not involved in collusion, cheating or money laundering.
The system is also designed to guard against problem gambling: Customers can exclude themselves from wagering on the site.
"The devil is in the details," Lipparelli said. "I want a comfort level that all requirements had been covered."
Vaughan said the South Point's Internet poker system has social media elements built in. "Poker is a social game, and there are ways to invite friends to play," he said.
Gaming regulators also want the South Point's online site to meet the same licensing requirements as a typical casino, which includes a compliance committee and other safeguards.
South Point's attorney said the company would pay the state a $500,000 interactive license fee once all the conditions of the application are met.
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