A Big Week in Online Gaming, for NV, NJ and Delaware

Published On June 26, 2012 | By Ken Dreifach | Uncategorized
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The Nevada Gaming Commission last week approved two interactive gambling licenses, opening a path for interstate, online poker.  The recipients, International Game Technology (IGT) and Bally Technologies, Inc. are the first two companies to receive that certification, since Nevada officials approved online gambling regulations in January.

Bally and IGT now await news as to which individual casinos will receive online licenses.  To be licensed under Nevada regulations, an online casino (as opposed to a service provider, or game manufacturer) must operate “from Nevada.”

Nevada’s regulations also require, among other things, that online gambling platforms have age verification methods in place, and block out-of-state players from any pay-for-play games.   (A synopsis of Nevada’s new regulations is here.)

In the meantime, gaming legislators in New Jersey and Delaware were equally busy.  The New Jersey Assembly Budget and Appropriations Committee cleared its only online gambling bill, A2578, which will now move forward to the Assembly for a full vote.  The bill previously had passed the Assembly Budget and Appropriations Committee, and a companion bill continues to work its way through the State Senate.  The New Jersey bill would permit only Atlantic City casinos to host online gambling, requiring that all equipment used for Internet wagering be located on the premises of an Atlantic City casino hotel or at a nearby Atlantic City location.

And in Delaware, a bill authorizing online betting for sports wagering as well as casino gambling passed the Senate Executive Committee, and will be voted on by the full Senate.  That bill, House 333, was approved by the Delaware House a few days earlier.  If passed, the bill would expand betting on NFL games to more than twenty sites in Delaware:  currently, sports betting is permitted only at the state’s three physical casinos.  The Delaware bill is somewhat different from the Nevada and New Jersey models in that it would place enforcement and operation under the control of the Delaware Lottery.  It also calls for creation of fairly detailed regulatory provisions.  For instance,

  • While geo-location software is required, the Lottery may permit out of state players where their wagering is not inconsistent with any federal or other state’s law (or is subject to an interstate compact);
  • The Lottery Director must establish specific rules and regulations, such as around payouts, wagering limits, and other game rules;
  • The Lottery Director must prohibit gambling in the name of any corporation (this theoretically might require, for instance, that the Lottery or its payment processor block corporate credit cards);
  • The Lottery must set out specific procedures regarding how account holders log in, authenticate, agree to terms and conditions, and even regarding log out upon specified periods of inactivity;
  • The Lottery must also implement online mechanisms for players to limit their own wagers, both “per game or during any specified time period”;
  • Similarly, rules must be created around age verification, and self-exclusion (e.g., for reasons of compulsive gambling), with information about treatment available online.

This continued flurry of state legislative activity is in response to the U.S. Justice Department having revised its longstanding position on online gambling – concluding late last year, in an opinion letter, that the federal Wire Act does not prohibit states from authorizing gambling for their own respective citizens.  A number of states are thus moving quickly to permit online gambling within their borders, with an eye towards creating interstate compacts upon the establishment of online gaming in a critical mass of states.

About The Author

Ken counsels clients on complex issues involving information privacy and data law, online liability, consumer regulatory and gaming law, including regulatory response, and adherence to self-regulatory guidelines for online advertising. Ken has had more than twenty years of experience in high-profile regulatory, in-house and private practice roles, including as Chief of the New York Attorney General’s Internet Bureau. He is one of the nation’s leading authorities on the relationship between emerging advertising technologies and online privacy.

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