Nevada – Poker Online approved by Gaming Commission
The online gaming industry was shocked when eleven executives from the three largest online poker sites (PokerStars, Full Tilt Poker, Absolute Poker) were charged with bank fraud and money laundering in April 2011. The prosecutors immediately shut down the sites and aimed at recovering $3 billion from the companies.
The seized companies are based out of Antigua and the Isle of Man which made it hard for the American authorities to crack down on the businesses, which had millions of US members. The online gambling has been said to have been in the scope for the Justice Department for years and the action in April was simply the end of a long investigation against the biggest players.
This isn’t the first time the Department of Justice tries to tie down internet gambling. In a previous indirect effort the Justice Department went after companies that facilitated advertising for the gambling sites. Microsoft, Google and Yahoo paid a combined amount of $31.5 million to settle federal charges that were brought up due to promotion of illegal gambling via ads.
The Department of Justice was later on (in July 2011) asked by senators Harry Reid (Democrat of Nevada) and Jon Kyl (Republican of Arizona) to elucidate its position regarding online poker and gambling. The goal is said to have been to either confirm that federal law forbids gambling online or to make certain that Congress plays a part in drafting the development of online gambling. What the senators questioned was the federal interpretation of the Wire Act of 1961, which was used by the Department of Justice in pursuit of online gaming and poker. In an article in the New York Times it was also confirmed that Illinois and New York also asked for a clarification from the federal government regarding said act (Wire Act of 1961). The act prohibited those states from selling lottery tickets online to adults within their own borders.
The Department of Justice replied by revising its long-held opposition to many forms of online gambling. By removing the legal obstacle for online gambling, states can now sanction online gambling as a way to fight their budget deficits:
“Although the opinion dealt specifically with lottery tickets, it opened the door for states to allow Internet poker and other forms of online betting that do not involve sports. Many states are interested in online gambling as a way to raise tax revenue.“
Edward Wyatt (nytimes.com). Dec 24th 2011
The Justice Department added that even though the new guiding principle “differs from the department’s previous interpretation of the Wire Act, it reflects the department’s position in Congressional testimony at the time the Wire Act was passed in 1961.”
This simply reverses the Justice Department’s longstanding position that all forms of online gambling are illegal in the United States. It does not necessarily pave the way for national rules governing online gambling.
Video discussing the legalization of online poker in Nevada
Nevada Gaming Commission approved Online Poker
The Nevada bill to establish requirements governing the licensing and operation of online poker passed unanimously through the state assembly judiciary committee in April, though in a much different form than introduced.
AB 258 no longer allows for international or interstate compacts, giving it a much smaller scale for the moment. All that remains is intrastate poker, and there are doubts that Nevada can produce the liquidity for a successful online poker network within the state.
Like most people expected the Nevada Gaming Commission (NGC) approved Regulation 5A Thursday the 22nd of December. The Commissions unanimous vote to approve this regulation means that rules for intrastate online poker and operator licensing requirements are now in place. Although online poker is now legal for the first time in history within the state Nevada there are not yet a single licensed poker room. The first licensed poker rooms in Nevada are expected to be open around 1st of February, however that is yet to be seen as the date is getting closer and closer.
While the poker rooms will be able to operate in the state of Nevada they’ll have to wait for the Federal government to legalize online poker before offering it on an interstate level. If the Federal government decides to regulate online poker on a national level then Nevada is a step in front of all other states in the race for the US online poker market.
Even though states are likely to see some money coming in from the legalization of online poker people question how much:
“Make no mistake, though: this is a move with eyes towards the future of nationwide online gaming. In all but the most populous states, intrastate online poker is not viewed as something that will be a revenue windfall, as it will be extremely difficult for the poker rooms to build up a large enough customer base.“
Dan Katz (pokernewsdaily.com). Dec 26th 2011.
The goal for the State of Nevada is nevertheless clear. By becoming the nation’s leader when it comes to online poker licensing, they will most likely attract operators to establish roots in Nevada when the entire US market is opened up.
Nevada Online Poker Regulations
The online gambling regulations that have been agreed upon are among others:
- The legal age for online poker in Nevada will be 21.
- Players are only allowed to have one account at any given operator and they are not allowed to use fake names.
- Licensees will be required to maintain a revolving fund of $20,000 to pay for compliance investigations.
- Player funds may be deposited with credit cards.
- Transfers between poker players on an inter-state level are not permitted. Meaning that transactions from a Nevada poker player to an account outside the state is not allowed.
- Operators must take proactive steps to prevent bot use.
- The poker hands played in the online Nevada casinos are to be kept by the operator for at least 5 years.
Nevada Online Poker Licenses
So far no companies have received a license from the State of Nevada to run legalized online poker. However there are a few companies that have applied for Nevada online poker licenses:
- International Game Technology
- Bally Technologies
- Cantor Gaming
- Caesars Entertainment Corp.
- Boyd Gaming Corp.
- 888 Holdings
The licenses are approved by the Nevada Gaming Commission and on their website they write:
“All applicants and licensees should submit their establishment name, license number and e-mail address for the appropriate regulatory compliance contact within their organization to this e-mail address: email@example.com.”
Nevada Gaming Commission
The Nevada Gaming Commission is a five-member lay body appointed by the Governor, which serves in a part-time capacity. The primary responsibilities of the Commission include acting on the recommendations of the State Gaming Control Board in licensing matters and ruling in work permit appeal cases. The Commission is the final authority on licensing matters, having the ability to approve, restrict, limit, condition, deny, revoke, or suspend any gaming license. Additionally, the Commission is charged with the responsibility of promulgating regulations to implement and enforce the State laws governing gaming.
Members of Nevada Gaming Commission:
- Peter C. Bernhard (Chairman)
- Tony Alamo, M.D.
- Joseph W. Brown
- John T. Moran, Jr.
- Randolph J. Townsend
The general legal situation for poker in Nevada
Seeing since the State of Nevada is home to Las Vegas which is more or less the gambling capital of the United States, Nevada is quite gambling friendly. There are however strict regulations for gambling businesses and part of the reason why Nevada has been able to offer legalized gambling so effectively is because they’ve learned how to regulate the industry.
In a normal casino in Nevada poker is one of many games that are offered to their customers; the staff are rigorously trained and inspected by the Nevada Gaming Commission.
The State of Nevada also allows private games in which no operator is charging fees or in other ways charging the people participating in the games according to Nevada’s Penal Code (NRS 463.0152):
“Game” or “gambling game” means any game played with cards, dice, equipment or any mechanical, electromechanical or electronic device or machine for money, property, checks, credit or any representative of value, including, without limiting the generality of the foregoing, faro, monte, roulette, keno, bingo, fan-tan, twenty-one, blackjack, seven-and-a-half, big injun, klondike, craps, poker, chuck-a-luck, Chinese chuck-a-luck (dai shu), wheel of fortune, chemin de fer, baccarat, pai gow, beat the banker, panguingui, slot machine, any banking or percentage game or any other game or device approved by the Commission, but does not include games played with cards in private homes or residences in which no person makes money for operating the game, except as a player, or games operated by charitable or educational organizations which are approved by the Board pursuant to the provisions of NRS 463.409.
So hosting private games is no problem in the State of Nevada.
More information about Nevada and Online Poker
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