Online Regulation?

Mar 16, 2010 5:22 PM

It must have been a slow week at the Gaming Control Board. What else could have those rule-writing dudes aiming their long, flinty-eyed stares at the online poker business, thinking about trying to fix something that really doesn’t require fixing.

It’s suggesting the popular use of dot-net companies to connect the big wide world of poker players with opportunities for action smacks of hypocrisy. Make that unacceptable hypocrisy, and officials appear inclined to "fix" this problem with some new rules.

So regulators threw out an opinion last week that suggested they have had it up to here, as the saying goes, with casinos allowing the use of dot-net companies as a vehicle for cruising past the barriers in legislation that crimped the style of everyone trying to keep the Internet poker business alive and well in the U.S.

Dot-nets, it was suggested, enable gamblers to get up close and personal to the forbidden fruit – the real money gambling offered by dot-coms.

Gee, that was hard to figure out.

Board Member Randy Sayre heads the GCB’s enforcement activities and is probably the person who lit the fuse on this effort to do some fixing. It’s easy to imagine him prodding his colleagues forward, arguing that the wide use of dot-net operations, with their no-real-money-needed approach, to advance the interest of dot-coms is embarrassing the state of Nevada. A moment of thought and he might have added, Dot-nets are hypocrisy with a capital H and, yes, this is going on right here in Nevada.

I can imagine Board Chairman Dennis Neilander heaving a sigh or two, telling Sayre to run the notion of more control up the flag pole, see who salutes, and the chairman then getting back to the serious business of seeing where to make cuts because tax revenues are drying up faster than Lake Mead.

I wonder how much thought the trio has given to the fact that the cumulative impact of dot-net and dot-com businesses has been the production of taxable gaming revenue and other associated spending at a time when the state needs all the retail spending it can encourage.

Neither did they work up a sweat, I’m guessing, reviewing their history lessons – how the creation of current restrictions was the result of something resembling a political passion play, the legislation getting itself attached to a port security bill by a conservative Senate leader intent on throwing a bone to Republican conservatives who had decided outlawing Internet gambling was a vote for family values.

He was gambling, if you’ll pardon the expression, that pro poker politicians were not going to vote against port security. And he was right. The anti-gambling crowd loved the idea of a ban, gamblers hated it.

As quickly as the crippling legislation was passed efforts to reverse it were kicked off with the strong support of House Financial Services Committee Chairman Barney Frank. The let’s-legalize-tax-and-regulate Internet poker proposal is currently working its way through the legislative process.

So why can’t the Control Board point its regulation writing energies in another direction long enough to see what transpires in Washington.

Even the enforcement of limitations on Internet poker have been delayed till at least mid-year.

The fact that dot-nets were created as a perfectly legal non-gambling alternative to that, uh … well, other world where the dot-coms exist, should not be seen as anything other than what it was – an effort to stay in business, keep the revenue flowing. Call it cosmetics, call it whatever you want. But it’s legal.

Besides, many of the points Sayre touched on in a conversation last week with a Las Vegas reporter have already been thoroughly explored in earlier Control Board explorations of Internet gambling.

Former Control Board member Bobby Siller, a law and order kind of guy if there ever was one, told Harrah’s Entertainment bosses several years ago that he thought efforts to restrict dot-net companies in the poker business would run into free speech issues. The dot-nets, Siller recognized, were legally crafted entities that had a right to push their non-gambling approach to the promotion of Nevada’s big poker events. Lawyers and strategists skilled in the fine art of crafting user friendly detours around crippling regulations had done their work well.

Sayre is not the first Board official who tried to fill up a slow day by knocking out one of those get-your-act-together letters to casino executives about one issue or another.

Former Board Chairman Richard Bunker tried it years before Sayre arrived on the scene. The result: he was "slapped down," as one source remembers, by legislators and a judge who said in so many words that advisory letters from the Board might provide interesting reading but the way to regulate gaming was with regulations that were products of a well-defined process.