Nevada urged to move on Web gaming market

Reno businessman Paul Mathews Jr. cut right to the heart of what he and fellow members of the governor's Gaming Policy Committee hope to address over the next five months: Nevada needs to capitalize on the rapidly changing Internet gaming market.

Online gaming offers Nevada the best available opportunity to grow its economy, added Mathews, a founder of the Internet technology provider Wagerworks, bought by International Game Technology in 2005.

"It's time for Nevada to be able to leverage its regulatory apparatus to our benefit," said Mathews, a co-owner of incuBET, a company that develops online computer games. "We need to take what we do around the block and around the world. In order to do that, we need some legislation."

Gov. Brian Sandoval revived the long-dormant committee primarily to help the state address the growing Internet gaming potential.

"We have to be mindful of what is going on around us," Sandoval said Wednesday at the panel's first public hearing. "We are not an island anymore. There are 40-plus states that have gaming right now. Internet gaming is happening as we speak. I'm not aware of any group that is addressing business and gaming issues. The time is right for a gaming policy review."

The committee, which was last convened in the 1980s, includes the chairmen of Nevada's two gaming regulatory bodies, gaming executives, lawyers, business leaders and two legislative representatives. Sandoval said Internet gaming would be explored from all aspects. He also asked that the public take part in the process.

"The purpose of this committee is to hear everything and not take a narrow view," Sandoval said.

The only committee member who was absent was Assembly Judiciary Chairman William Horne, D-Las Vegas.

In his opening remarks, Sandoval said he wants the committee to meet four times before the end of August with a report for the Legislature being drafted after the final meeting. The governor wasn't ready to commit the report to having specific proposals that could lead to bill drafts for the 2013 session.

"This committee is advisory in nature," Sandoval said after the 90-minute meeting at the Clark County Government Center. "It will identify issues, and whatever comes out will be brought to the attention of the Legislature. As long as Nevada continues to lead, that's what I want to see come out of this committee."

The audience at the hearing -- gaming company representatives, regulators, gaming attorneys and gaming lobbyists -- was given an overview of state regulations for licensing and operating Internet poker sites, which were approved by Nevada gaming regulators in January after several months of hearings.

Gaming Control Board Chairman Mark Lipparelli said he expects the regulations, which are not based on those of any other jurisdiction, will be modified over time.

So far, more than two dozen casino operators and gaming equipment manufacturers have applied for Interactive gaming licenses. Lipparelli said state regulators could conduct public hearings on the first licenses in May or June.

However, websites catering to in-state poker players can't go live until the technology is approved.

"We have not seen any systems submitted yet for approval," Lipparelli said.

Nevada Gaming Commission Chairman Pete Bernhard expressed confidence the regulations and technology would guard against underage and problem gambling.

"These regulations are in place to protect players," Bernhard said.

MGM Resorts Chairman Jim Murren gave panelists an historical perspective on how gaming technology can be slow to gain acceptance.

The company operated an online casino licensed by the Isle of Man nearly 10 years ago and used technology that kept U.S.-based customers from gambling on the website.

"Because it was successful in keeping out Americans, it failed miserably," Murren said.

Closer to home, the company was one of the first casino operators to embrace ticket in-ticket out cashless gaming for its slot machines, which is now an industry standard. But that idea, too, "failed miserably" at first.

Murren said most of the major gaming companies and the Washington D.C.-based American Gaming Association are supportive of a "federal solution" that legalizes Internet poker. However, other states may soon join Nevada in legalizing Internet poker wagering within their state borders.

Mathews said federal legalization was the best solution for poker because it isn't optimal for business to have 17 different states with closed Intrastate poker websites.

"Liquidity is the key to poker," Mathews said. "The best opportunity is to legalize poker on the federal level and let Nevada regulate it. That way we can prove we can do this right."

Sandoval said he expects the committee to provide some valuable input.

"When this committee meets, it's important," Sandoval said.

Contact reporter Howard Stutz at hstutz@reviewjournal. com or 702-477-3871. Follow @howardstutz on Twitter.