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Nevada Doesn't Want To License Banks, Credit Card Firms For Its Internet Poker Industry

Change To Regulations Makes It Easier For Such Companies To Be Involved

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Nevada is about to embark on its real-money online gaming experiment, and it doesn’t necessarily want to have to license firms like Visa, Bank of America and Google.

On Thursday in Las Vegas, Silver State gaming regulators adopted revisions to a set of rules overseeing so-called “service providers” — companies that will be involved with the business of an online poker site but won’t actually be in charge of the games. That power is reserved for the state’s familiar casino giants. Most have applied for such a license.

The new regulations make it so that Nevada officials don’t “overreach” when overseeing the fledgling industry, according to Gaming Commission chairman Peter Bernhard. In other words, regulators are afraid of being a burden to non-gaming companies that offer services to a wide range of industries and won’t likely have a physical presence in the state.

“I don’t want to see the wheels of commerce grind to a halt,” Bernhard added.

However, the regulation that covers geo-location, identity verification and payment processing firms is still open for further amendments. Regulators will undoubtedly learn more as the industry takes shape and if any big problems arise. The stakes are high since Nevada will likely have an intrastate market long before any other U.S. state, making its success or failure of high interest to lawmakers in other states and on Capitol Hill.

In the case of a credit card company, it wouldn’t have to obtain licensure in order to facilitate player deposits, only as long as the casino or the online poker site assumes responsibility for any mishap in the payment processing. Regulators want someone to be accountable.

Just because a Visa touches the online poker funds along the way doesn’t mean it needs a Nevada online poker license. The Silver State also doesn’t have the resources to vet every entity involved. Not long ago, rules were passed to oversee third-party testing labs that assist in inspecting web poker technology. Nevada said it needed help.

Nevada Deputy Attorney General Michael Somps, the man who actually crafted the regulatory language, told the Gaming Commission on Thursday that there’s a “serious obligation on the operator to make sure due diligence” is followed. If Google data was used for geo-location and that information was inaccurate, the Nevada licensee would be on the hook if a player gambled from outside the state’s borders. Neighboring Utah has outlawed web gambling.

Former Gaming Control Board chairman Dennis Neilander chimed into the discussion, saying that the regulation, as written, gives Nevada companies “flexibility.” Ellen Whittemore, an attorney for International Game Technology and Bally Technologies (both already web poker licensees), told regulators that she is happy with the new rules.

Online poker in Nevada will likely begin this fall when South Point Poker opens its doors.

Follow Brian Pempus on Twitter — @brianpempus