ISI and the Remote Future for Gambling in Nevada

Internet Sports International is banking on the adoption of remote intrastate gambling in Nevada to solidify its presence in the state's coveted gaming market.

The company's kiosk-based system gained regulatory approval in Nevada in the spring of 2003, and they're hopeful the Nevada Gaming Commission will now approve its intrastate gaming technology.

"The Gaming Control Board is getting very comfortable with what we are doing with the kiosks We have 20 casinos on the system so far and we hope to double that by next year. The more they see how this can work safely and effectively, the more open they will be to expanding the system to other areas."

- William Stearns
Internet Sports International

The ISI kiosk enables casino operators to provide sports betting and information to guests throughout their properties. The ATM-like units are placed in high-traffic areas of the casino where sports betting traditionally doesn't occur.

The units operate 24 hours a day, enabling casinos' sports books to take action even after they're closed.

Now ISI is turning its focus to its second generation technology, which features intrastate gambling capabilities.

"The Gaming Control Board is reviewing its rules on convenience betting," ISI President William Stearns said. "There is a push to get betting at bars, pools and other non-gaming areas of a property approved."

Nevada regulators are considering a variety of platforms for intrastate betting, and ISI is hopeful that a new tablet-sized product it co-developed will get serious consideration. The portable device enables casino visitors to place bets from anywhere on the property.

"It is all activated by a thumbprint which uses geo-tracking for security measures," Stearns explained. "Once a thumbprint is stored in the system for the active user of the device, the only way it can be operated is through that person's thumbprint activating it. The protective measures are very high and offer a higher degree of safety that what you will find on the Internet."

The Gaming Control Board met Friday to discuss intrastate gambling. If the board opts to expand intrastate gaming to allow remote wagering, IWI could be in a good position to capitalize.

"The Gaming Control Board is getting very comfortable with what we are doing with the kiosks," Stearns said. "We have 20 casinos on the system so far and we hope to double that by next year. The more they see how this can work safely and effectively, the more open they will be to expanding the system to other areas."

Such a system could ultimately be a precursor to full-fledged Internet gambling, but Stearns doesn't see that happening soon.

"That would be a big jump from what they are allowing now," he said. "It might happen some day, but the focus right now is more along the lines of closed-loop systems."

The kiosk and the wagering tablet in development operate off of a true Intranet system.

"There is no stored information on a Web-based server," Stearns said. "It is all done within the system which is (interconnected), but inaccessible to the outside world."

ISI tapped American Wagering Inc. (AWI) to help implement its 20 gaming kiosks in Nevada as well as attract new partners. AWI, which manages race and sports books and sells and services race and sports book computer systems, will also help ISI deliver the system in other jurisdictions.

"Once we have our kiosks in place and operational in Nevada, we intend to expand into other jurisdictions where sports gaming is legal," Stearns said. "We wanted to have the entire network withstand the rigors of gaming commission approval in the most professional and highly regulated market we would find. If we were able to do it in Nevada, we would be able to take our system anywhere."

American Wagering's CFO, Tim Lockinger, said the biggest hurdle in getting the gaming kiosks to market was enduring rigorous testing by the Gaming Control Board, and he expects the same for any other ISI-developed system.

Regulators are leery to approve any system until they have absolute assurance that it can't be tampered with, Lockinger said. They are also likely to be suspicious of any plan that could lead to illegal gaming activates.

Stearns said ISI has reached a deal with a computer tablet company to bring the ISI software and system to walk-around units. The system, he said, could open up a world of opportunities for property owners.

"If approved," he said, "casinos can give their high rollers the device as a courtesy to place sports bets while they walk around the casino floor, playing blackjack or sitting by the pool. For others, the casino could charge a per-hour fee just to use the device."

If and when an Internet-based intrastate system is approved, Stearns believes there will still be a demand for the kiosks and tablets on site.

"Casinos will always offer that extra customer service touch that people can't get online," he said. "And Nevada properties still rely on a lot of business from customers who come from states were gaming is limited and they would be locked out of any Internet-based system. Our products get the most out of users while they remain on the property. They can still go have a nice dinner or sit poolside but you can still get them to gamble while they do it."