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Kevin Smith

Nevada to Decide on Interactive Gaming

2 December 2002

With the public-comment period over, the Nevada Gaming Commission will likely soon decide whether it should regulate intrastate interactive gaming.

The commission began focusing on an intrastate system after being informed in August by the U.S. Department of Justice that any interstate system would be in violation of federal law, specifically the 1961 Interstate Wire Act.

The commission subsequently spent the next three months gathering public input from interested parties and operators to gauge the amount of interest in Nevada in intrastate gaming.

At its November meeting, the commission heard three hours of presentations from various parties concerned with the issue. Among those to testify were trade organizations and companies that specialize in technology for regulating such a system.

Commission Chairman Peter Bernhard said the commission will continue to accept public comment on the subject, but the November meeting concluded what he called an "information gathering" stage.

A decision on which direction the commission will take, he said, should come by the early part of next year.

"We are compiling all the information through our staff that has been presented," Bernhard explained. "I hope to have some sort of a compilation of information by the early part of next year. We can then review that and decide where the commission needs to go from there."

Frank Catania a spokesperson for the Interactive Gaming Council (IGC), a trade association for Internet gaming operators and suppliers, feels that regulators are closer to accepting an intrastate system than they are letting on.

Catania spoke to the commission in November on behalf of the IGC to encourage regulation of I-gaming instead of prohibition. He explained how such an approach could affect the industry and how it could be put into place in Las Vegas.

He also pointed to what he called a changing tide in the perception of online gaming due to a recent U.S. Federal Court of Appeals decision. In the cited case, the courts upheld an earlier ruling that MasterCard and Visa were not obligated to forgive debts incurred through online gambling because online casino transactions aren't a violation of the Wire Act. The ruling, he said, could translate to a favorable future for interactive gaming in Nevada.

"What I see happening now is that Las Vegas, especially after the MasterCard decision, will move ahead with intrastate gaming," Catania said. "They are the only state that realizes that this is something that is here to stay and they have to get on board and be ready for it. In my opinion, I think they are getting ready for it and I think they are ready to do something with regard to it."

Bernhard isn't ready to sign off on any plan. He acknowledged that the public-comment meetings were a great opportunity for the commission to educate itself on the intricacies of interactive gaming, but also said that more questions have to be asked.

"The materials presented to us show that it is still an open question," he said. "There are arguments for and arguments against that have been presented to us, and I don't think there is any real consensus at this point on which direction to take."

Those opposed to an intrastate interactive gaming system feel that it could hurt business at Nevada's land-based gaming properties.

Others argue that an intrastate gaming system could actually increase the amount of users who gamble within the state.

There are also those who would prefer to see an interstate system, although Catania advised that advocates of regulated Internet gambling should welcome any initiative in Nevada to adopt interactive gambling.

"You have to take your battles one by one," he said. "You have to take some things no matter what. We might not profit as an entire industry from intrastate gaming, but it is a move in the right direction. It is something that is happening and moving ahead and could lead to bigger and better things for the entire industry."

Click here to view the IGC's submission to the Nevada Gaming Commission.

Nevada to Decide on Interactive Gaming is republished from
Kevin Smith
Kevin Smith