Licenses to Take Nevada Bets Online Could Open Before Thanksgiving
SAN FRANCISCO -- Nevada’s top gambling regulator predicted his agency will be ready within six months to start work certifying operators to take in-state bets online, assuming Congress doesn’t act on the issue meanwhile. Even with federal indictments last month of three leading offshore Internet poker operators, it has become ever clearer the past 12 months that online gambling is here to stay, Chairman Mark Lipparelli of Nevada’s Gaming Control Board said late Tuesday.
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"I've asked our staff to begin crafting regulations” to carry out a dormant state law allowing “interactive gaming,” Lipparelli said at the Global iGaming Summit. He said he expects the rules to be published for discussion by mid-July. But “we still lean toward a preference to national regulation that we could link into,” Lipparelli said. Commission representatives have visited island jurisdictions off Europe that regulate online gambling, such as Gibraltar and the Isle of Man, and the agency has a memorandum of understanding for information-sharing with Alderney in the Channel Islands between the U.K. and France, he said. The International Association of Gaming Regulators is in a good position to promote common oversight frameworks, he said.
Lipparelli said that in judging license applications he would take into account whether operators had “changed their mindset” from accepting bets from the U.S. after the federal Unlawful Internet Gambling Enforcement Act of 2006 took effect. Standards shouldn’t be lowered to the disadvantage of “those that have played by the rules,” he said. But Lipparelli promptly added that a change of ownership or the replacement of important executives could change a company’s eligibility for a license. Martin Horan, the acting chief of the Bureau of Gambling Control in California’s Justice Department, said he expects legislation to determine in the state how the acceptance of U.S. bets would affect offshore operators’ eligibility for licenses. The opportunities under U.S. legalization for offshore operators that have allowed American players was a topic of recurring interest at the industry conference this week (WID May 18 p1).
No state allows online gambling. The District of Columbia has legalized Internet poker betting, under its Lottery & Charitable Games Control Board, by players in the city. In March, Republican Gov. Chris Christie vetoed a measure that would have made New Jersey the first state to regulate online gambling.
"It’s a rather odd debate that’s taking place at the moment” about which interests, many of them commercial, will get the most protection in legalization legislation, said CEO André Wilsenach of Alderney’s Gaming Control Commission. “It’s really never about … legislation that will best protect the player."
Extending regulation to Internet gambling is no problem for government agencies that oversee betting at brick-and-mortar outlets, Wilsenach said. “Online is probably an easier industry to regulate,” he said. Nevada and New Jersey “probably wouldn’t find it very hard to transition” from their casino oversight, Wilsenach said. “There’s an amazing audit trail” in Internet gaming. All the action can be examined “hand by hand,” he said. “All that the regulators need to do is check,” before allowing online bets, that their technology tools work, Wilsenach said.
But Horan indicated that the preparation needed isn’t as brief as some assume. Bills in the California Legislature anticipate that betting will start three months after enactment, he said. “Sorry to say, that’s not the case,” Horan said. “It’s probably more like 18-24 months before we get Internet gaming up and running."
And it’s impossible to keep players from outside a state or country out of its regulated online gambling, as governments routinely seek to do, Wilsenach said. “There’s always going to be some leakage outside of your country to the rest of the world,” he said. With the Internet, “you're dealing with something limitless,” Wilsenach said. Enforcing geographic restrictions “using IP blocking and the banks” is “easier said than done,” he said. The efforts have been ineffective in Europe, Wilsenach said. “Customers are spoiled for choice, and they go across the border and have a ball.”
Governments that try to limit gamblers to those in their jurisdictions will “lose players” and “income to the rest of the world,” Wilsenach said. Cooperation between governments will deepen beyond the information-sharing that’s been taking place, he said. Operators will be allowed to take bets across aligning governments’ jurisdictions, to increase bettors’ participation by raising the prizes at stake, Wilsenach predicted. France and Italy just took a step in this direction, he said. Italy has found success limiting advertising of online betting to licensed operators, Wilsenach said. “Players have moved” from the unregulated international dot-com sites to the country’s licensed “dot-IT sites as a result,” he said.