Legal, Corporate Issues Highlight Nevada Gaming Commission Call for Online Poker Comments

Legal, Corporate Issues Highlight Nevada Gaming Commission Call for Online Poker Comments

In advance of Nevada giving the green light to the state’s first real-money online poker sites, the Nevada Gaming Commission has released all public comments received about the state’s future plans to seek interstate compacts with other US states that would allow Nevada to provide services to that state’s players.

vegas-signAt last count, 17 corporate and individual commenters had provided input to the NGC, ranging from already approved Nevada licensees such as Caesars, SHFL (ShuffleMaster) and 88 Holdings, to licensee wannabe, to individuals such as gaming attorney David Gzesh and former Florida PPA state director Martin “PokerXanadu” Shapiro.

The open comments period closed on April 15th, and here’s the complete list of comments the NGC has published to date, complete with links for your reading leisure. We’ve included a highlight or two from each, though in many cases the comments run to several pages:

Klein Moynihan Turco (KMT) — A follow-up to the Caesars comments (below), regarding the general advisability of entering into multi-state compacts and the likely prohibitions in any future US federal legislation.

Responsible Gaming Networks — A geo-location service that pimps itself while dismissing the technology of earlier respondent XYVerify (below) as being inadequate. — Uniformity of games offered in multiple states, concern over interstate player collusion and applicable legal enforcement.

Aristocrat Technologies Incorporated — Concerns included “harmonization of taxation” between states and an in-common set of regulatory standards for operators to follow.

Caesars Entertainment — Concerns over licensee “suitability”, in that a prospective applicant might go jurisdiction-shopping to be licensed in the most lenient of states who compact with Nevada. (Is the ongoing Caesars/AGA war in New Jersey with Rational/PokerStars behind this inclusion?) Also, a proposal that multistate player liquidity be based on licensed brands, and a call for multistate player disputes be handled in the state of primary network responsibility — Nevada. Caesars also recommends that Nevada quickly authorize all games online, in addition to poke, to compete with states such as Delaware.

Gzesh Law Ltd — Among other points, David Gzesh introduces the possibility of players relocating from another poker-legal and/or compacted state to Nevada, to avoid state income tax in their original locale.

SHFL Entertainment — Stresses the desirability of a single large data center operating the Nevada networks, rather than hardware centers in each compacted state. Also stresses the need for uniform rake (and tax levies) in poker across state lines.

Multimedia Games — Assumes revenue-sharing deal between states must pre-exist (which seems logical), and stresses the need for regulatory uniformity to reduce operator overhead.

XYverify — Essentially a pimpage of the New York state firm’s own geo-location services, based on existing cell-network technology.

888 Holdings — Promotes the use of a single-state home for the networks, as opposed to networks in multiple states then pooling their players in a mixed gaming environment. Rake uniformity in cash games; proper jurisdictional agreements to cover remote-player disputes.

Academicon — This German marketing firm with online gambling experience recommending three areas where firm regulations regarding interstate gaming should be mandatory: taxes, player protection and payment options. Revenue and rake shares (in poker cash games) dependent upon physical location of each player, which means a rake-earned model by player is recommended.

Alderney Gambling Control Commission — Among the most interesting of the comments received, given that the AGCC is the only other regulator to comment. (The AGCC suffered its own major black eye with its non-oversight of Full Tilt Poker, and its comments belie a caution missing from the other comments.) One of the AGCC’s points, applicable in-state as well as interstate, was that Nevada refrain from “over-specifying, which may place undue restraint on regulators.” The AGCC included six points it thought merited further consideration: revenue sharing (rake), collection/distribution of tax revenues; interstate licensing standards; dispute resolution processes; common technology standards; cross-border credit risks and player fund protection. The last seems superfluous, and a misapplication of European standards to the US financial system.

Automated Revenue Collection Systems — A recommendation for Nevada to at least communicate with other states such as New Jersey and Delaware, to avoid a “balkanization in interactive gaming created by the various States drafting widely divergent regulations.”

Ray Bacon — Recommendation to make anti-cheating standards and links very visible for players.

PokerXanadu — Stresses the need for several different forms of player protections.

David Stewart — A wish from a player to open the Nevada sites to all states not specifically banning online gambling, along with the introduction to these states’ players of all forms of online gambling except sportsbetting. (It’s not gonna happen, Dave, but a good try!)

Derek Scholl — Short note from a player emphasizing that interstate access will be necessary to achieve proper liquidity and cost justification.

If there’s a general consensus from the comments, it’s that a contributed-rake model, with revenues which are then distributed to states based on the contributing players’ physical locations, is the only way to go; asking states to accept a pro-rated slice of overall revenues is less likely to appeal to potential compacting states.


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