Searching for Nevada's Cyber Borders

Bill White believes his Denver-based technology company has a solution that would enable the state of Nevada to establish an intrastate online gambling system that doesn't violate federal law. The company is called Global Cyber Licensing, and White, CEO, delivered a presentation to the Nevada Gaming Commission last month outlining how its product can bring I-gaming in a regulated, controlled environment to Nevada consumers by using the U.S. government's global positioning system (GPS) of satellites to guarantee the exact location of the player.

"We are here today to show how you can extend the same sort of regulatory oversight to remote gambling that is currently enjoyed with casino-based gambling." - Bill White Global Cyber Licensing

It was the second commission hearing in a one-month span in which the prospect of regulated Internet gambling was discussed. Since the passing of a law three years ago permitting online gambling in the state, the commission has met off and on to consider whether Internet gambling activity can be contained within state borders--a criterion that must be met to comply with the federal policy.

White told the commission that remote gambling and land-based gambling are "essentially the same."

"Only the methods of delivery are different," he explained. "We are here today to show how you can extend the same sort of regulatory oversight to remote gambling that is currently enjoyed with casino-based gambling."

The solution requires a GPS receiver that's about half the size of a mouse. The receiver is equipped with a USB plug that enables it to easily connect to the gambler's computer. The device captures constantly broadcast information from the GPS satellites and encrypts the raw data and sends it to a central server that determines the player's exact location.

Next, the central server determines whether the user is located within Nevada's borders and sends a "yes" or "no" answer to the betting operator, which can allow site access to in-state gamers and deny access to all others.

Global Cyber also says its service prevents hacking by tying a password to a user and his location. That way it is not possible for an individual to steal another person's password and use it from another location.

Using a laptop equipped with the tracking device, White and his colleagues gave a 10-minute demonstration, proving that the system could locate the computer to within a few meters. The boardroom in which the meeting took place had two windows, so the demonstration worked perfectly, showing the exact longitude and latitude of the laptop's location. But apparently the system has problems functioning in rooms with no windows.

"Until now it was nearly impossible to accurately receive GPS signals indoors," Global Cyber Vice President Paul Siegel explained. "We've spent more than $6 million and three-plus years working on perfecting this system, but only in the last four or five months has a reliable indoor GPS receiver been available on the market."

Global Cyber holds an exclusive license to deploy the patented system through a predecessor company called Cyber Locator Inc.

Marc Warren, the Gambling Commission's senior research specialist, will review the presentations.

"The plan for now is that at this next month's commission meeting (on July 29), I've been tasked with basically summarizing what was presented by the various speakers and then going through our statutes and regulations and looking at which laws would have to be amended or what regulations would have to be adopted to allow for this kind of gambling if the board and commission decide they want to go forward with this," Warren said.

Legalizing intrastate remote gambling, said Warren, "is something that may require the legislature to ultimately decide. We're dealing with the public policy with respect to gaming, which is set forth in our statute, but it's something that both chairmen of the commission and board may decide is worthy of having the legislature look at since they are ultimately responsible for setting the public policy in our state. Frankly, I don't know where it's going to go."

Siegel said Global Cyber is meanwhile trying to get its service on the agenda at the International Association of Gaming Regulators Annual Conference in September in Scottsdale, Arizona. If he's successful, the company will display its technology before key regulators from around the world.

The company has also had meetings with regulators in the U.S. Virgin Islands. Like their counterparts in Nevada, the USVI regulators have cleared the way for remote gambling by passing legislation, but have been handcuffed by the U.S. Justice Department's position. According to Siegel, the Virgin Islands regulators have informally stated that they would not go forward with remote gambling unless they were to adopt Global Cyber's system or its equivalent. "And there is no equivalent," Siegal added, "so we feel pretty good about that."

Bruce Merati of Virtgame, a company that's testing sports betting kiosks in bars and taverns in Clark County, Nevada, testified in June as well. Merati and other officials with Virtgame also spoke before the commission at the previous meeting in mid May.