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"Historic" Nevada license for legal Internet poker clears hurdle

7 Jun 2012

By Howard Stutz
Nevada made its initial stride toward joining the Internet poker world Wednesday, but gaming regulators were quick to note that many more steps are needed before the first hands are dealt.

Slot machine maker Bally Technologies, Inc. received a unanimous recommendation by the Gaming Control Board for the first interactive gaming license ever to be issued to a manufacturer of online gaming systems.

The matter will be taken up by the Nevada Gaming Commission on June 21.

The hourlong hearing in Carson City marked the first time since Nevada gaming authorities approved regulations covering interactive gaming - online poker within the state's borders - that a company was considered for licensing.

"We're going to see a myriad of applications," said Gaming Control Board Chairman Mark Lipparelli. "This is another step. It's a thoughtful and diligent step, but it's not the last step. The are no questions about Bally's underlying suitability. The company will have the first interactive gaming license in the U.S."

Bally Technologies general counsel Mark Lerner called the application "historic," because it was the first time a request for an interactive gaming license had been heard anywhere in the U.S.

The hearing had a surreal moment. Lerner used an iPad to play a free game of Internet poker - it would be illegal if money were involved - to demonstrate Bally technology used by the Golden Nugget.

"Did you win?" one regulator quipped.

Bally executives said the technology would allow customers to play for real money in Nevada, but those outside the state in markets that don't allow Internet wagering could also play for free.

Regulators heard new terms, such as "geo-tracking," the technology used by the websites to control who can and cannot legally play on the site.

Bally was seeking approval for online wagering systems it will market to casino operators when they are eventually licensed by Nevada.

The hearing, which was telecast in Las Vegas, attracted gaming attorneys and company representatives from Caesars Interactive Gaming, the South Point, Shuffle Master, and Cantor Gaming. All have applied for interactive licensing licenses in Nevada.

Bally said it acquired technology "and people" from several international online gaming companies, but not the companies themselves. Bally executives said they want to keep "an arm's length relationship" with the Internet providers.

Most of the questions focused on Europe's Chiligaming. Bally acquired the company's Internet gaming platform earlier this year and has asked the company, which is licensed in France, to close its legal Internet gaming sites when the transaction is finalized. Activity logs also show Chiligaming has accepted no wagers from the U.S. since 2008.

"By acquiring just the technology, that takes away the risk, rather than acquiring a company and inheriting all their history," Lerner said.

Bally executives also encouraged the control board to approve Internet poker activity on mobile devices, such as smartphones and tablet computers. They said studies showed more people are accessing the Internet through a mobile device rather than a desktop computer.

Slot machine maker International Game Technology today is scheduled to appear before the board seeking approval for an interactive gaming license. Hearings on William Hill PLC's takeover of several Nevada sports books orignally planned for Wednesday were rescheduled for today, as well.

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