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Is online poker on deck?

Nov 27, 2007 4:44 AM

Despite federal laws that ban online gambling, several experts believe online poker in the U.S. will be legal within 18 months.

Speaking at the Global Gaming Expo in Las Vegas two weeks ago, former Senator Alfonse D’Amato, chairman of the Poker Players’ Alliance interest group, said he expects legalization of online poker to occur within 18 months.

Echoing his sentiments were other panelists on G2E’s State of the Industry: Internet Gambling at the Crossroads keynote session.

The panelists included D’Amato; J. Terrence Lanni, chairman and CEO of MGM MIRAGE; Gary Loveman, chairman, CEO and president of Harrah’s Entertainment, Inc.; and Andre Wilsenach, CEO of the Alderney Gambling Control Commission.

They also tended to support the notion that online poker would likely be legalized before other forms of Internet gambling, such as sports betting and casino-style games.

There was consensus among the panelists that it is possible to successfully regulate Internet gambling to prevent underage gambling and ensure player protection, but these types of protections don’t currently exist across the board.

With the U.S. ban on Internet gambling financial transactions keeping well-known, reputable companies out of the marketplace, the panelists expressed concern about player protection in an environment dominated by unregulated or poorly regulated sites.

"I am afraid the U.S. customer today is very exposed — there’s no player protection," Andre Wilsenach said.

Wilsenach highlighted a distinct difference in the mindset of U.S. regulators and U.K. regulators when it comes to regulating Internet gambling. In the United States, he said, the concern is how an Internet gambling site will exclude players, but in the United Kingdom and other jurisdictions, the concern is how each site will handle player protection.

To provide an example of how an Internet gambling site can be responsibly run, Terry Lanni described MGM MIRAGE’s experience some years ago with running a site on the Isle of Man that did not accept wagers from the United States.

According to Lanni, the technology put in place for the site allowed the company to ascertain where a player lived, verify the player’s age and also provide a problem gambling component.

While the technology was viable, competing with unregulated companies that did not put the same stringent screening processes in place made the project economically unfeasible, Lanni said. He emphasized, however, that the company now has experience with the technology required to keep underage gamblers from playing and is ready to "unpack" it once online gambling is legalised and regulated in the United States.

Lanni underlined the value of having established, trusted brands in the marketplace, saying that the major brands give people the comfort they want and the assurance that customers will receive their winnings. He cited a survey showing that around 70 percent of online gamblers aren’t confident in the integrity of the online sites they frequent as evidence of the importance of having well-known brands in the mix.

According to Gary Loveman, Harrah’s already is exploring the possibility of expanding its World Series of Poker brand by creating Internet gambling sites in countries where it is legal to do so.

Both Lanni and Loveman emphasized that they have no desire to explore jurisdictions where the laws may be unclear — any work they do in the Internet gambling sector will only be done in places where the activity is clearly permissible by law.

When asked whether Internet gambling should be regulated at the state or federal level if legalized, Lanni and Loveman both supported state-level regulation.

Lanni explained that the states currently are responsible for gaming regulation, and they do it very effectively. He pointed out that the federal entities that would be charged with regulating Internet gambling under legislation currently being considered in Congress aren’t able to fulfill all of their current duties, and that adding this responsibility to their other burdens makes no sense.