Gaming regulators unveil rules to oversee Internet poker

The state Gaming Control Board on Wednesday, Aug. 24, 2011, issued a draft of proposed regulations governing Internet poker. In this file photo, a woman who wished to remain anonymous plays online.

The state Gaming Control Board on Wednesday issued a draft of proposed regulations governing Internet poker, a first step in establishing a framework for licensing online poker operators by a Jan. 31 deadline.

The draft regulations were sent to gaming license holders statewide to solicit their input and will be discussed in public workshops starting Sept. 26. Regulators will gather testimony and make revisions before the Nevada Gaming Commission votes on the regulations. Regulators are expected to approve the rules in December.

The regulations come amid a federal crackdown on Internet poker by the Justice Department, which has long declared all forms of online gambling to be illegal. Nevada officials have said their efforts to legalize online poker won’t conflict with federal prosecution of unlicensed operators who have flouted the Justice Department’s ban. Nevada’s regulations are expected to allow for the state regulation of Internet poker nationwide should Congress approve online poker regulations at the federal level.

The effort stems from legislation supported by Gov. Brian Sandoval and Control Board Chairman Mark Lipparelli, who view Internet poker as a potential moneymaker for the state and a way for Nevada to gain early dominance as a headquarters for national and global Internet gambling operations.

“There is no better home for ‘iGaming’ in the U.S. than in Nevada,” Lipparelli said. “The (Gaming Control) Board has successfully regulated the gaming industry for more than 50 years and is clearly best positioned to establish and administer a balanced set of regulations that allows a new form of commerce to begin and upholds our regulatory principles protecting the betting public.”

The proposed regulations cover licensing suitability, technology approvals, auditing, record-keeping, customer enrollment, internal controls and a progressive disciplinary process for regulatory violations.

The public will be able to voice objections to online poker or push for more stringent rules governing certain aspects of it, such as protections for problem gamblers and age-verification procedures, Lipparelli said.

Aside from what’s expected to be “a good deal of revision” in the coming months, the regulations are a done deal because the legislation required the Gaming Commission to adopt licensing rules by the end of January, he said.

Critics of Internet gambling have concerns about how effectively regulators of brick-and-mortar casinos can protect against fraud and other problems in the virtual world. Regulators have acknowledged that there may be no way to assure that minors aren’t gambling online using their parents’ credit cards and passwords.

Besides the latest crackdown, which resulted in federal indictments against the three biggest poker websites doing business in the United States, the Internet abounds with stories of collusion and other fraud committed by online players using false or secret identities.

Despite such fears, Lipparelli has thrown his support behind Internet poker because he thinks safeguards have evolved to a point where the business can be effectively monitored. Online poker rooms would be required to meet standards similar to Nevada’s casinos, “giving players as much confidence as possible in the entities and technologies that might eventually gain approval,” he said.

“Internet poker has become a multibillion-dollar business around the world. The technology supporting it, while not perfect, has improved dramatically since introduction,” Lipparelli said.

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  1. My biggest concern is underage gambling online. Simply put, it is almost impossible to verify the age of an online user.

    The best system I have seen yet is how some adult webcam sites do it. They require that a potential "model" submit high resolution photos of them holding a picture ID such as a drivers license or passport next to their head, as well as a high resolution photo of the ID itself.

    This is not perfect, but such methods are surprisingly good at detecting fake IDs *if* the staff are properly trained and actually want to do that.

    The standard approach of assuming anyone with a valid credit card is 18 would not apply since the age limit is 21, and any enterprising 14yr old can get Mom or Dad's credit card information almost at will.

    There are other methods, such as collecting enough personal data to run a credit header scan, but again, any motivated 14yr old can get hold of their parents information, and probably that of their teachers as well.

    When you consider that people can buy a fake ID for as little as $50 it should be easy to see that this will be a serious issue to deal with.

    I speak to this issue as a programmer who has been designing and implementing such systems for 13 years.

  2. interesting point boftx.

    Online gambling sites, probably because they were regulated and located offshore, most of them required you to be 18 years of age. I am not sure whether or not the regulators will settle on 21 or not. There are a few casinos in America that require you only be 18 , turning stone in New York and Soaring Eagle in Michigan are the ones that I can think of. I thought the reason casinos settled on 21 was because that is the legal drinking age so thought it easier to just cut the gambling age at 21. Online sites won't have to worry about that.

    Their usual fail safe against underage gamblers was that the player had to send a photocopy id of themselves and a bank statement at the time of their first withdrawal. The current gambling bills, if they pass will probably not allow use of credit cards- I'm thinking most likely they will be funded by cards purchased at stores like prepaid cards but get carded at purchase. Who knows what they will come up with but I'm sure there will be failsafes.

  3. I am not arguing for or against online poker (if anything I lean towards being in favor of it.)

    Just because minors can circumvent existing age restrictions doesn't mean we shouldn't have them. Would you argue that there should be no age restrictions on smoking and drinking? I doubt it.

    My point is that this will be an issue that will need extensive study to determine how it can be realistically dealt with. And it is not just from the standpoint that minors should not be allowed to gamble that this is important.

    Consider this scenario: John Sr. makes a deposit using his credit card and then loses it all. He calls up the bank and requests a charge back saying he didn't make the purchase, his child did. I see this all the time and it is invariably honored without question in the adult internet world.