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Battle Lines Emerge in Remote Gaming Debate

25 May 2004

Las Vegas Sun

LAS VEGAS -- Battle lines are being drawn between opposing sides of issues surrounding intrastate remote gaming -- gambling using high-tech devices that allow gamblers to wager without being on a casino floor.

The most contentious issues so far: whether problem gambling would increase with the introduction of the new devices, and whether operators of large resort properties would lose business to smaller operators with restricted licenses that offer technology allowing players to place bets remotely.

Remote gaming technology encompasses several types of devices. They include cellular telephones and data transmitting devices; kiosks that are stations for taking sports wagers in locations that don't generate much traffic, such as rural properties; and hand-held devices that would enable wagering away from the casinos floor -- a resort bar, swimming pool or hotel room, for example.

They also include personal computers and using the Internet to place wagers -- which is illegal in the United States.

The Nevada Gaming Commission and the state Gaming Control Board met Friday to solicit comments on several aspects of remote gaming.

Commissioners will conduct a similar information-gathering session in Carson City on June 17, then go to work drafting policies, regulations and legislation to be submitted in time for the next legislative session.

But before regulators could begin working on any rules, they first wanted to get a comprehensive look at what issues had to be discussed and what policies the public wanted to consider.

Commissioners established an outline to gather information on proposed limits on venues, economic considerations, controls on limiting wagering to people in Nevada, problem gambling, gambling by minors and venue access. Regulators also asked for comments on problems involving identity theft, hacking and compliance with existing statutes and regulations.

One of the top issues commissioners must reconcile is the impact remote devices could have on problem gambling.

Carol O'Hare, executive director of the Nevada Council on Problem Gambling, told commissioners that while she had no evidence to support concerns remote gaming systems would increase the prevalence of problem gambling, studies have indicated that players in a more comfortable environment are less inhibited and more likely to be susceptible to problem gambling behavior.

"The more you move into (gaming in) remote areas, the more you play into the denial nature of somebody who has a problem," O'Hare said.

Nevada Resort Association President Bill Bible also sounded a cautionary note, urging commissioners to review recent research on problem gambling and gambling by adolescents.

The other major concern raised came from companies holding nonrestricted gaming licenses, those that have more than 15 devices, who don't want to lose customers to small operations that could have a remote device to place a sports bet or play keno from a remote location.

Barry Lieberman, general counsel for Coast Casinos Inc., a Las Vegas locals company that is being acquired by Boyd Gaming Corp., said his company opposes remote gambling in locations with restricted licenses, noting that resort operations invest millions in their properties to qualify for nonrestricted licenses.

Scott Nielson, executive vice president of Station Casinos Inc., said his company hasn't taken a stance on the issue.

Most of the people who offered testimony Friday supported regulations allowing more remote gaming.

"Nevada needs to continue to be the leader in the gaming industry," said Mel Molnick, chief executive of Home Gambling Network Inc.

Most agreed that allowing additional access remotely would help local properties stay competitive with rapidly increasing numbers of Indian casinos and offshore Internet casinos. Some suggested that regulatory tweaking could help jump-start betting on horse racing.

One of the most daunting tasks in establishing regulations for remote gaming is to update existing rules that would conflict with new rules and to keep ahead of the technological curve.

Tim Lockinger, chief financial officer of American Wagering Inc., which operates a chain of sports books, said the company's hand-held wagering devices wouldn't require many regulatory changes because their system offers access to games that have a common betting pool, such as a sports book, keno or bingo.

He said he could see some problems if the devices tied in to games with random number generators -- slot machines -- or table games. Slots or table games tied to remote locations, such as hotel rooms, could fall within the state's "gaming salon" laws.

Commission Chairman Peter Bernhard also noted that the Nevada Legislature has frowned upon policy allowing gambling in hotel rooms.

Some who testified said technology is advancing that would assure companies that offer remote gaming the ability to verify a bettor's identity and location. But others said there were no safeguards in place to prevent someone from being verified as a qualified player and then handing a device off to a minor or problem gambler.

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