Interstate Phone-in Horse Race Betting Plan Weighed

CARSON CITY -- A plan to revive the dormant horse race betting business in Nevada was outlined Thursday, a proposal that would permit the state's race books to take wagers from customers in other states.

Tony Cabot, a Las Vegas lawyer representing the Nevada Pari-Mutuel Association, told the state Gaming Commission that Nevada was in a perfect position to join with 17 other states that already accept telephone bets on horse races.

The commission conducted a public hearing on two regulations that would permit people in other states to set up accounts at Nevada books and then place telephone bets. The commission indicated it would vote on the proposals at its Sept. 27 meeting.

Dennis Neilander, chairman of the Nevada Gaming Control Board, said the regulation would permit bets to be made over the telephone but there would be no wagering through the Internet. Some other states permit Internet betting but Neilander said this was a "first step" into the interstate betting arena. He said Internet wagering may be allowed in the future.

Senior Deputy Attorney General Toni Cowan said Nevada has looked at the other states that permit out-of-state wagering and there are "holes in their system" of regulation. She told the commission Nevada already has a regulatory system that could be use to police the out-of-state betting.

She said the proposed system would "allow Nevada to enter on a level playing field."

Cabot said that residents in an estimated 33 states that don't prohibit interstate betting could call a race book and deposit money into an account either through a credit card or an electronic transfer of money.

The would-be-bettor would give his name, home address, telephone number, age, social security number and other information. The information would be verified to determine if the bettor lived in an authorized state and if he was 21 and old enough to bet.

The book would do the first verification and an independent third party would do a second verification.

If the player's identity and authorized location pan out, he'd be allowed to call in his bets.

Nevada pari-mutuel betting volume has fallen from a high of $619 million to $516 million in 2003. In contrast, Cabot said Oregon handles more than $1 billion in bets and California has $400 million. Cabot said he hoped Nevada's 86 books could lure away some of that business.

Neilander said the proposed regulation would not allow out-of-state telephone betting on sports or dog racing.

Seventeen other states are already accepting out-of-state wagers on horse races and there has not been any problem, regulators said.

There were questions whether those younger than 21 would be able to bet. Cowan said the regulation provides a reasonable level of regulation. But she conceded that a minor might be able to use the password of his parents and make bets.

But the commission was told the profile of a horse race bettor was 55 and holder and male.

After the testimony, Commission Chairman Peter Bernhard said the state was "treading into a new area. We have to be suspicious about it." He said additional testimony would be accepted in Las Vegas before a vote was taken.

There was no testimony opposing the proposal Thursday.

The proposed regulation would allow creation of a "call center" for small books to join where the bettor could telephone to place a bet. Cabot said it takes a big investment to set up the out-of-state telephone wagering system and small businesses may want to join in a single center.

The bettor would pre-fund his account at the casino and then telephone a special number at the call center to place the wager. There would be recordings made of all voice wagering which would be kept for 60 days to refer to in case of a dispute over a bet.

Cabot also told the board that a bettor would be responsible for keeping his password secret just like a customer of a bank that uses an ATM.

The commission praised Cowan and Gaming Board member Bobby Siller for developing the proposed regulations.