LAS VEGAS — In a blow to those hoping the state’s casino companies would be able to tap into the multibillion-dollar Internet gambling business, the state’s top gaming regulators said Thursday they are unable to proceed with plans to write rules legalizing interstate cyber-gambling.
“The question about federal legality remains unanswered,” Nevada Gaming Control Board Chairman Dennis Neilander said after hearing a presentation from the state’s attorney general’s office. “I told the legislators last year that we will not go forward without a green light.”
The report, presented by Assistant Chief Deputy Attorney General Jeff Rodefer at Thursday’s Nevada Gaming Commission meeting, said federal laws on the issue are unclear. A Nevada law passed last year requires regulators to find that Internet gambling is legal before they can write rules enabling the state’s casinos to accept Web bets.
Rodefer’s report analyzed the effect of federal laws on Assembly Bill 466, the Internet casino legislation signed into law by Gov. Kenny Guinn on June 14. Barring congressional action or a reversal of a long-standing Department of Justice opinion that interstate Internet casino gambling violates the Wire Act, a 1961 federal law targeting interstate sports betting, Neilander said regulators won’t be able to write rules allowing the state’s casino operators to take Internet casino wagers from bettors outside Nevada.
When Guinn signed AB466, some industry experts thought the new law would allow the state’s casinos to capture a large share of the Internet gambling market, a rapidly growing business that experts predict will generate $6.3 billion worldwide by next year. Powerful brand names owned by Strip megaresorts like Caesars Palace, the MGM Grand and Bellagio would quickly capture market share from current Internet casinos operating with little or no regulation from offshore jurisdictions, they argued. Further, proponents said Nevada’s regulatory credibility would add to a gambling Web site’s allure, and the taxes raised would help alleviate the state’s ongoing cash crunch.
Instead, two of the state’s biggest operators are preparing to offer Internet casino betting from the Isle of Man, a small, semi-independent island in the Irish Sea. MGM Mirage was one of three companies to win licenses when the Manx government awarded situs judi terpercaya licenses last fall, and the company hopes to begin operation in about a year. Station Casinos announced last month it had reached a deal with Sun International Hotels to purchase half of its already operating Isle Of Man-licensed site. Station hopes to receive Manx regulatory approval to begin participating in the site by September.
Isle of Man Web casinos are prohibited from taking bets from jurisdictions where the practice is illegal, including every state in the United States. Internet gaming proponents were disappointed that state regulators won’t allow the state’s casinos to take bets from outside Nevada. “It’s unfortunate that we’ll be unable to allow international and interstate interactive gaming,” said Richard Fitzpatrick, president of the Interactive Gaming Institute of Nevada. “Nevada will lose a lot of money. Our companies are going to have to operate from outside the U.S., but I don’t blame the (regulators). They’re following the law.”
Fitzpatrick suggested that the state’s operators can still enter the Internet gambling business on a smaller scale, offering intrastate betting to gamblers within Nevada’s borders. Neilander and commission Chairman Pete Bernhard sent a copy of Rodefer’s report to the Department of Justice asking for guidance. “The results of the legal research are somewhat inconclusive,” the two top regulators wrote. “Nevada’s regulatory bodies are neither in favor of nor against any specific policy position and would not seek to ‘lobby’ the Department of Justice.”
Neilander said a Justice Department official acknowledged receipt of the letter and report and promised to respond after reviewing them. “Congressional action clarifying whether or not interstate Internet gaming is legal would be the most certain way for us to make the required finding (that Web betting will or won’t violate federal law),” Neilander said. “But if the DOJ were to say they’ve changed their position and that the Wire Act only applies to sports betting and not to casino-style games, that would open a lot of doors.”