Internet gambling prompts rare meeting of Gaming Policy Committee
28 March 2012
29 March 2012 10:13 a.m.
Gov. Brian Sandoval will solicit all viewpoints on Internet gambling — including those of Las Vegas Sands Chairman Sheldon Adelson and other critics — to develop policies to manage and regulate the rapidly changing industry that could be headed to the United States someday.
Sandoval, presiding over the first meeting of his revamped Gaming Policy Committee on Wednesday, said the 11-member panel’s objective would be to recommend public policy positions and suggest legislation in advance of online gaming approval and to make sure Nevada continues as a global leader in industry regulation and commercial competition.
The 90-minute meeting was primarily a policy review session for the committee, comprising industry leaders, state legislators, regulators and the public. Sandoval said the committee’s purpose would be finely focused and within a strict timeline — he wants the group’s efforts to be completed by the end of August so that it can issue a report and suggest bill drafts in advance of the 2013 legislative session.
Sandoval said the committee would meet four more times, roughly every four to six weeks, and he encouraged representatives of the gaming industry to weigh in with their views on how Nevada could best leverage Internet gambling and enable the state to be the gold standard in regulation and policy.
The Gaming Policy Committee is a seldom-used sounding board to discuss issues critical to the industry. The committee was initiated by Gov. Grant Sawyer in 1961 and last used by Gov. Richard Bryan in 1984 to discuss pari-mutuel race wagering. Over the years, the committee has addressed the role of entertainment in the casino setting as well as discrimination and equal rights in casinos.
The Internet gambling policy debate could be one of the most complex issues the committee has undertaken. The result of the committee’s work could yield either some of the most important polices ever produced for the state’s economic future or much ado about nothing if lawmakers fail to address the issue.
Most believe that the need for government entities to generate revenue will pressure lawmakers to act on Internet gambling eventually, but how it would be made allowable is an open question. Sandoval says he wants the state to be ready for any eventuality, including the prospect of Nevada offering intrastate wagering if federal lawmakers fail to act.
While most within the industry think some form of online gambling is coming — more than 20 companies already are lining up to secure online gaming licenses in the state — others, like Adelson, are opposed to Internet wagering.
One of the leading voices in the industry, Adelson is unconvinced that the technology exists to prevent underage players from wagering online. Others fear that online poker players could conspire to cheat in games against other players.
The Nevada Gaming Commission has approved regulations for online poker play and will review systems submitted for licensing to make sure a licensee can verify the identity of a player and the player’s location to comply with the state laws and regulations.
In remarks during the meeting, Sandoval alluded to another vexing issue regarding online play — that it doesn’t occur in the public eye.
For years, Nevada regulated that gambling be permitted in public settings, even ordering some locations with cover charges to open their doors to people who wanted to play. But over time, the public setting regulations were diluted with special licenses and permits for private high-roller salons.
More recently, regulators approved gaming with mobile devices in hotel rooms.
Online gaming takes the issue to a new level if gamblers can play from their computer screens or mobile devices.
In future meetings, Sandoval said committee agendas would include discussions on what other states and jurisdictions were doing with Internet gambling, how Nevada could leverage itself as a leader in online wagering, the rapid growth of technology in the industry and what economic impact online gaming could have on the state.
On Wednesday, Nevada Gaming Commission Chairman Peter Bernhard and Gaming Control Board Chairman Mark Lipparelli supplied background on the events leading to Nevada’s passage of Internet gambling regulations, including the U.S. Justice Department’s interpretation of the Wire Act, state inquiries seeking clarification of Justice Department interpretations and rules that are in place to prevent illegal underage gambling, collusion and fraud.
Other states have made similar inquiries of the Justice Department, seeking interpretations of how federal policies would affect, for example, the Internet sale of lottery tickets.
Committee member Jim Murren, CEO of MGM Resorts International, shares the widespread industry belief that the federal government should regulate Internet gambling in the United States to avoid a patchwork of differing rules state by state. He also wants to see the committee address how gambling on social media sites like Facebook and Twitter would be addressed.
“I think if anything goes wrong on this, we know we will be punished for it,” Murren said.
Paul Mathews Jr., of Las Vegas-based IncuBET, a game designer, said the Internet gambling issue was critical to Nevada. It offers an economic opportunity if Nevada were to become a host jurisdiction or a regulatory hub for online gaming.
Sandoval thanked the approximately 75 people who attended the meeting, which included all eight Control Board and commission regulators, and industry attorneys, educators and company executives, and encouraged public input at future meetings.
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