License approvals are milestone in Nevada’s push for online gaming
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Internet poker play could begin within the state’s borders by the end of the year after the Nevada Gaming Commission unanimously approved licenses to two leading gaming equipment manufacturers on Thursday.
In the annals of gaming industry history, Las Vegas-based Bally Technologies will be remembered as the first company in the United States to receive an interactive gaming license, even though slot manufacturing giant International Game Technology, based in Reno, got its license less than an hour later.
Richard Haddrill, CEO of Bally Technologies, said his company has contracted with Landry Gaming’s Golden Nugget property in downtown Las Vegas to provide an Internet poker product and, after a routine testing process by regulators, expects it to be ready for play by the end of the year or early 2013. He said the company also is negotiating with other prospective customers.
Robert Melendres, executive vice president of emerging businesses for IGT, said his company also is on track to provide its system to customers, but wouldn’t disclose the names of prospective clients. IGT has touted its 13 years of experience as a licensee in Europe where it is licensed in Alderney, a British Crown dependency on an island in the English Channel.
The state’s online gaming regulations require that licensees prove that their systems are capable of identifying players by location and that players are of legal age. Companies also are required to safeguard against money laundering, problem gambling and player collusion.
Thursday’s approval of the licenses is another milestone in efforts to allow online gambling, which state leaders believe will boost the casino industry and bring new technology jobs to Nevada.
The Justice Department has determined that Internet gambling across state lines is illegal, but several states, including Nevada, have interpreted the decisions that they allow online play within the borders of a state where gambling is legal.
Most online gaming advocates hope federal lawmakers will pass legislation making interstate poker play legal and to establish consistent standards nationwide. A notable exception is Las Vegas Sands Chairman Sheldon Adelson, who is unconvinced that online systems would be able to detect underage players.
Both Bally and IGT consider themselves to be business-to-business interactive gaming system providers, meaning they likely wouldn’t establish their own poker sites, but would contract with casino companies and provide systems that would be branded for their properties.
Several other companies have their own applications for licenses on file and regulators are expected to consider them in the months ahead.
Earlier this week, Station Casinos’ Fertitta Interactive announced that it would begin offering a free-play poker game on its Facebook page on Friday with plans of turning it into a real-money game when the company is licensed.
IGT’s Melendres said his company’s long history of operating in Nevada’s regulatory environment and fielding robust responsible gaming and anti-money laundering strategies should ease concerns about how the company it acquired used to operate.
IGT purchased Stockholm, Sweden-based Entraction Holding for $115 million in 2011. Regulators investigated Entraction for illegally accepting wagers from U.S. customers, but Melendres said IGT bought the company for its technology and quickly adopted policies to not accept wagers from any questionable source.
Bally also went the acquisition route for its online poker product.
It acquired Chiligaming, a French company founded in 2006, and in February Bally began work to place the system at the Golden Nugget as a free-play website.
With Thursday’s licensing and further testing planned, the site eventually would be converted to a real-money site.
Haddrill said the system includes software to detect a player’s location with built-in safeguards to assure that a legal player has logged on.
The system also monitors play and would shut a game down if it detects aberrations in play that would suggest player collusion.