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More Nevada Restrictions on Internet Gambling

3/13/10 - It could be a more progressive approach to online gambling, or maybe more restrictions, but a member of the Nevada Gaming Control Board is apparently drafting a document that will clarify the relationships between Nevada-licensed land casino operators and their online counterparts.
 
The draft will be considered by the Gaming Control Board, and its progress will be closely watched by major online gambling companies that have contractual relationships with Nevada land gambling firms - think Everest Poker and Harrah's WSOP; The Venetian and Pokerstars' North American Poker Tour; and Face the Ace television show sponsored by Full Tilt just for starters.
 
Outside the US, Harrah's, through its interactive entertainment division, has business deals for three online gaming sites in the United Kingdom, including one for the World Series of Poker. None of the sites can be accessed by Americans.
 
News of the draft document comes from the reliable and respected Howard Stutz of GamingWire this week, who advises that Gaming Control Board member Randall Sayre is drafting a letter to the casino industry that sets guidelines for entering into deals with Internet gaming businesses.
 
"We don't have a policy and clearly the board needs to boil down exactly what that policy needs to be," Sayre told GamingWire. "Some gaming licensees play carefully by the rules and others do not. I do not believe the board can remain silent on this any longer."
 
Veteran gaming attorney Frank Schreck agreed that the control board needs to set rules for dealing with Internet gaming businesses. He said responsibility for complying with regulations falls on the casinos.
 
"There is a lot of confusion right now in the industry and there needs to be some regulatory guidelines," Schreck said. "All we're asking is to tell us what is permissible."
 
Among other things, Sayre's draft will address the .com vs .net marketing strategy that Internet gambling companies have deployed to avoid complications with enforcement authorities in the United States, where the legal status of online gambling is confusing and uncertain.
 
"Oftentimes, there is very little difference between the dot-nets and dot-coms," Sayre said. "This is something that has been tolerated but the board needs to ask itself if this relationship is reasonable."
 
GamingWire notes that several years ago, the World Series Poker set self-imposed guidelines prohibiting online gamblers from qualifying to the tournament through the Internet. The move reduced the number of entries into the tournament's $10 000 buy-in main event by more than 27 percent from its peak year. 
 
The workaround in that case was for online poker companies to continue to run qualifiers, but pay the winning sponsorship packages direct to the players, who would then make their own decisions and arrangements.
 
Television revenues are also a major consideration; the popularity of poker ensures big audiences and plenty of advertising.
 
GamingWire spoke to Seth Palansky of Harrah's Interactive Entertainment, but he was non-committal, saying the company was unsure how the control board's planned actions could affect the business.
 
"We don't deal in hypotheticals or what-ifs so we won't comment on anything that may or may not occur," Palansky wisely said.
 
GamingWire notes that Internet poker is credited with fueling the impressive growth in the World Series of Poker, which had 839 entries in the world championship main event in 2003 when Chris Moneymaker won the title. A year later, main-event entries soared to 2 576.
 
"When Jamie Gold won a record $12 million prize in 2006, entries topped out at 8,773. In the past three years, since Harrah's stopped players from gaining entry to the tournament online, the field for the world championship has averaged 6,500 players," Stutz writes.



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