The most surprising revelation to come out of the Nevada Gaming Commission hearing Thursday into the licensing of Caesars Interactive Entertainment wasn’t the company’s eventual approval.
Gaming Commission Chairman Pete Bernhard, the state’s top regulator, said he signed onto the Caesars Interactive-owned Playtika social gaming website recently to familiarize himself with how the business operates.
The commission approved Caesars Interactive, which is owned by Caesars Entertainment Corp., to operate an online poker website in Nevada under the World Series of Poker brand.
The company, which won’t launch the website until its European business partner 888 Holdings is licensed in Nevada, becomes the 17th casino operator or technology provider licensed under the state’s interactive gaming regulations.
Caesars Interactive manages the promotion and advertising aspects of the annual World Series of Poker. The Nevada website will allow only customers gambling on computers or mobile devices located within the state’s boundaries to place wagers.
Besides the World Series of Poker, Caesars Interactive manages the company’s growing social gaming business. Bernhard noted that increased revenues from social gaming were evident on Caesars latest balance sheets.
The Playtika-branded games are free to play, but players have opportunities to purchase thousands of virtual tokens for fees of less than $1.
Bernhard said he didn’t buy additional tokens, but played several hands of poker on the free play World Series of Poker site and pulled a few slot machine handles through Playtika’s Slotomania brand.
While playing poker, Bernhard noted that many players at his table had purchased virtual tokens and had much larger chip stacks.
“I had to go in several times to stay in the game,” Bernhard said.
Michael Cohen, general counsel for Caesars Interactive said most players on Playtika, don’t buy additional tokens, but that is quickly changing.
“Many people do spend money on virtual coins and that is leading to increased revenues,” Cohen said.
Social gaming and the World Series of Poker are the major components of Caesars Interactive.
The Nevada website will operate using technology provided by 888, which was found suitable in Nevada in 2011 to be a business partner of Caesars Interactive. The company is seeking full licensing as a provider of interactive gaming systems by the state.
Caesars and 888 Holdings now operate legal real money World Series of Poker websites in the United Kingdom, France and Italy.
In response to a question from Gaming Commission member Tony Alamo Jr., Caesars Interactive Chief Financial Officer Craig Abrahams estimated the legal Internet poker market in the U.S. could be anywhere between $3 billion and
$6 billion nationally.
“Unfortunately, it’s locked up,” Abrahams said.