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Senate committee approves Internet poker bill in Nevada

25 May 2011

By Chris Sieroty
LAS VEGAS, Nevada -- A bill to establish provisions governing the licensing and operation of Internet poker in Nevada was unanimously approved by the Senate Judiciary Committee on Tuesday.

"The genie is out of the bottle in terms of online gambling. There is a great need for regulation," Assemblyman William Horne, D-Las Vegas, and sponsor of Assembly Bill 258, told the committee during a hearing in Carson City. "Nobody is going to do it better than Nevada."

The bill authorizes the Nevada Gaming Commission to adopt regulations and to grant licenses to casinos to be ready to offer online poker if Congress passes an Internet gambling bill or if the U.S. Department of Justice says online gaming is allowed under federal law.

Internet poker for money is legal outside of the United States and is "generating billions of dollars worldwide," said Horne, adding that federal law does not bar a state from legalizing online poker within its own borders.

In 2006, a federal law prohibited banks and other financial companies from processing gambling transactions across state lines. The Unlawful Internet Gambling Enforcement Act also established the framework for legalizing intrastate gambling by declaring that online intrastate wagering does not constitute "unlawful Internet gambling" if expressly permitted by state law.

The committee accepted an amendment proposed by Peter Ernaut of the Nevada Resort Association to prevent both the state and federal government from taxing the industry. Ernaut said the amendment means that if the federal government levies a tax, the state would be prohibited from imposing its 6.75 percent gross gaming tax.

The bill directs state regulators to set rules that "ensure the protection of consumers, prevent fraud, guard against underage and problem gambling, and aid in law enforcement efforts."

It also requires them to set license fees to operate interactive gaming and for manufacturers and equipment associated with interactive gaming. The bill says a license for interactive poker may be issued to a resort that has held a nonrestricted license for at least five years before the application is filed.

The bill goes to the full Senate for a vote this week, then back to the Assembly for approval of amendments.

Online gambling has faced an uncertain future since the Justice Department seized the Internet domains of PokerStars, Full Tilt Poker and Absolute Poker on April 15, charging 12 individuals with violating federal law. The sites have been shut down to U.S. players.

In another case reminiscent of last month's "Black Friday" indictments, Rod Rosenstein, the U.S. Attorney for the District of Maryland in Baltimore, seized 11 bank accounts and 10 Internet domains on Monday.

The indictments of a Costa Rican and two Canadians stem from a Homeland Security Investigations sting. The agency created a payment-processing firm and used it to make personal contact with top managers of online gaming companies.

American Gaming Association CEO Frank Fahrenkopf Jr. on Tuesday called the indictments a "half measure" toward fixing the problem and reiterated his organization's support for federal licensing and regulation.

"Strong enforcement against illegal operators and unambiguous U.S. laws are vital," Fahrenkopf said in a statement. He said that oversight could prevent the use of online poker sites for money laundering or other illegal purposes.

The indictments in Maryland name ThrillX Systems Ltd. and BMX Entertainment, and individuals Darren Wright, David Parchomchuk and Ann Marie Puig. The seized sites included,,,,,,,, and

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