Nevada eyes offering Internet poker beyond state lines

The state Gaming Control Board on Wednesday, Aug. 24, 2011, issued a draft of proposed regulations governing Internet poker. In this file photo, a woman who wished to remain anonymous plays online.

The road to Nevada offering online poker to residents of other states is long and tortuous and gaming regulators took a step in that journey Wednesday when the state Gaming Control Board conducted a workshop meeting on a proposal for companies to offer progressive jackpots across state lines.

The state’s largest slot machine manufacturers — International Game Technology and Bally Technologies — petitioned the Nevada Gaming Commission to amend regulations to allow multijurisdictional progressive prizes.

Gaming Control Board Chairman A.G. Burnett concurred that adoption of the amendments to the regulation could be viewed as a first step toward developing online poker across state lines.

“You might say we’d be sticking our toe in the water,” Burnett said of the proposal.

With great fanfare, Gov. Brian Sandoval signed legislation approved early in the Nevada Legislature’s 2013 session paving the way for writing regulations that would enable play by people outside the state. People can already play poker online if they’re within the state’s borders, and Station Casinos is the only company that has been licensed and is operating an Internet poker site through its Ultimate Poker brand. Several other companies are on the verge of licensing and starting play.

Station hasn’t disclosed how much revenue it has generated with its intrastate online poker games, but Sandoval said it has done “extremely well.”

In July, the Control Board reported gross win from poker — which included Station’s online play — at $12.4 million for the month, up 3.4 percent from July 2012. The board can’t break out Internet poker win until there are three licensees in order to keep Station’s winnings confidential.

Poker winnings surpassed revenue generated by keno, bingo, pai gow poker and race and sports books.

Two key steps toward enabling interstate online poker play is directing the governor to enter agreements with other states and developing the technical specifications.

“I can’t enter into any compacts or agreements with other states until the Gaming Control Board and Gaming Commission adopt regulations to allow me to do so,” Sandoval said Tuesday. “We have had preliminary conversations with other states, but there is nothing I can do until the regulations are adopted, which I understand may happen next month.’

Asked if he has had conversations with other states about entering into a compact, Sandoval said, “They're interested.”

Commissioner John Moran Jr., who has had experience negotiating compacts with other states on Colorado River water usage, was appointed to develop regulations on interstate agreements.

The regulatory amendments that were reviewed at the Control Board’s 2 1/2-hour hearing Wednesday specifically address the technical aspects of deploying a network across state lines.

Bally’s and IGT’s motivation is to enable wide-area progressive jackpots over a larger area. The companies believe they can build jackpots larger and faster over multiple jurisdictions, the same way the Powerball lottery grows when it’s played in several states.

In order to allow multijurisdictional jackpots, two state regulations would have to be amended. Lionel, Sawyer & Collins lawyer Dan Reaser presented the petition on behalf of Bally and IGT.

Burnett said Wednesday’s session was to gather information, which will be turned over to the Gaming Commission, which reviews and conducts public hearings on proposed regulations. Hearings on the proposal are expected to be scheduled next month.