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Inside Gaming: Privacy must be a factor in creating online gaming policy

9 Apr 2012

By Howard Stutz
Gov. Brian Sandoval had departed the Nevada Gaming Commission chairmanship to run for attorney general when state regulators approved private gaming salons in 2002.

The regulation, which allowed casinos to set aside secluded gambling areas for big-spending high rollers, was the first time the state diverted from its long-standing policy that gaming take place in public view.

Sandoval brought up privacy last month during the initial meeting of the Gaming Policy Committee.

Nevada is about to embark on Internet gaming. State regulators in January approved regulations governing the operation of online poker sites. More than two dozen casino operators and gaming equipment manufacturers have applied for Interactive gaming licenses.

The first websites catering to in-state poker players could go live by fall once the technology is approved.

The policy committee, which Sandoval convened for the first time since the 1980s, will meet four times by August to look at ways the state can capitalize on the growing Internet gaming opportunities.

Sandoval, who is leading the panel, pointed out that Internet gaming is not as simple as approving regulations, licensing operators and throwing a switch to flip on the servers.

There is possible competition from rival states, looming potential of Congress legalizing Internet poker, and opponents who worry that online gaming will destroy Nevada's land-based casino industry.

There's also privacy.

In opening remarks on March 28 Sandoval said Nevada law requires "gaming be conducted in public."

The comment was somewhat ironic based on today's gaming standards. Private gaming salons, which were supported by major casino companies 10 years ago, are now common in the biggest Strip resorts catering to high-end baccarat business.

Also, Sandoval signed Assembly Bill 294 into law in June, which removed a prohibition on the use of mobile gaming devices by casino customers inside hotel rooms. Coincidentally, Sandoval signed AB 258 into law, which directed the gaming commission to adopt Internet poker regulations, on the same day he signed AB 294.

Maybe he was onto something.

Online gaming, played on computers and mobile devices, is clearly conducted in private.

Gaming has evolved since 1961 when the policy committee was put into place by Gov. Grant Sawyer to deal with entertainment issues, discrimination and equal rights.

In 51 years, the issues have changed.

"Gaming has always been out in the open. That's why I brought it up," Sandoval said. "It's a provocative issue. We also have to be mindful of what is going on around us. We're not an island anymore. There are some 40-plus states with gaming."

The policy committee, which includes lawmakers, gaming executives, business leaders, and state gaming regulators, is seeking input from all viewpoints on Internet gambling, both positive and negative.

As with the private gaming salon debate, big gaming is all-in on Internet poker. Many of the major casino operators have deals in place with established online gaming providers should Congress legalize Internet poker. The companies have also applied for Nevada Interactive gaming licenses.

Two of the policy committee's members are MGM Resorts International CEO Jim Murren and Boyd Gaming CEO Keith Smith, whose companies have separate agreements with European online gaming giant, operators of PartyPoker and the World Poker Tour.

Murren has become one of Internet poker legalization's most vocal proponents, calling it "the future of our state" and "the future of our industry."

Sandoval said he would welcome all opinions, including those of Las Vegas Sands Chairman Sheldon Adelson, who has come out against the U.S. legalizing Internet poker. Adelson is concerned that underage gambling can't be properly policed. M Resort President Anthony Marnell III expressed a similar viewpoint.

"The purpose of this committee is to hear everything," Sandoval said. "We're not taking a narrow view."

The panel is advisory in nature and a report that will be drafted following the last meeting in August could end up offering state lawmakers some direction for the 2013 session.

The governor, however, isn't committing to any specific ideas.

"It's important that whatever comes out of this committee be brought to the attention of the Legislature," Sandoval said. "If that means a bill draft to make sure that competitively, or from a regulatory standpoint, Nevada continues to lead, then that's what I would like to see."

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