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Gaming Guru

Howard Stutz

Nevada online poker talks draw little controversy

27 September 2011

LAS VEGAS, Nevada -- Proposed gaming regulations covering the operation of Internet poker in Nevada -- should the federal government legalize the activity -- drew lots of attention Monday, but little in the way of controversy.

The Gaming Control Board spent about 75 minutes taking public input into the proposed regulations, which cover all matters of regulatory oversight for a company looking to set up an Internet poker business in Nevada.

Just a handful of comments were offered during the session, which filled the control board's hearing room at the Sawyer Building with gaming lawyers, gaming industry consultants and representatives of Nevada slot machine makers and casino operators.

"I think we have a solid foundation for regulations," control board Chairman Mark Lipparelli said.

The proposed regulations were released at the end of August.

Lipparelli said the planned timetable for the regulations would be for additional public hearings at the control board's and Nevada Gaming Commission's November meetings, followed by adoption votes in December.

The state Legislature, through the passage of Assembly Bill 258, mandated that Internet poker regulations be established by Jan. 31.

"This timetable gives us some flexibility if something changes before January," Lipparelli said, such as Congress taking up legislation covering Internet poker.

Lipparelli said minor "cleanup language revisions and changes" for subsections of the regulations came from nearly a dozen proposals submitted by gaming equipment manufacturers, such as International Game Technology, Bally Technologies and Cantor Gaming, and by casino operators, including Caesars Entertainment Corp. and Boyd Gaming Corp.

Equipment testing company Gaming Laboratories International also suggested modifications.

Most of the companies asked the control board to keep their comments private.

Lipparelli expected to have a new draft of the regulations available within two weeks.

The only flare-up Monday was over the difference between intrastate poker -- gambling online within Nevada's borders -- and interstate poker -- gambling online across state boundaries.

Gaming attorney Anthony Cabot, who was representing Fertitta Gaming -- the company that owns 45 percent of Station Casinos -- suggested that the regulations carry some type of language that they could not be used for intrastate wagering until a federal ban on Internet gambling is lifted or there is a clarification from the U.S. Department of Justice.

Former control board member Randall Sayre, however, said the language was clarified during a Senate Judiciary Committee hearing on AB258. The regulations prohibit deployment of an intrastate system before the federal government takes action on interstate gaming.

Sayre, a past consultant to PokerStars, wouldn't say whom he was representing.

Cabot also wanted the regulations worded so that a gaming customer would have the "seamless ability" to transfer gaming funds between a casino account and an interactive gaming account, if they were operated by the same company.

Lipparelli said other language changes would define marketing representatives working with Internet gaming sites.

In answer to a question from an attorney, Lipparelli said any Nevada-licensed gaming equipment manufacturer or casino operator would have to apply for a second interactive gaming license under state statute.

Equipment makers pay a licensing fee of $125,000, plus $25,000 annually. The major casino operators pay $500,000 for the initial license fee and $250,000 annually.

The Internet gaming regulation proposals include rules for the finding of entity suitability, technology approvals, audit and record keeping, and customer enrollment. The proposals spelled out regulatory oversight of internal controls by the online gaming companies and established a disciplinary process for regulatory violations.
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