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NEVADA ASSEMBLY OKs INTERNET GAMING BILL

Apr 28, 2001 4:14 AM

Nevada lawmakers reached a compromise Friday on a bill that clears the way for the state’s casinos to enter the multibillion-dollar online gambling business.

The state’s smaller operators were concerned they’d be frozen out of the profits. But a revised bill authorizing the state to establish regulations for online casinos was overwhelmingly approved by the Assembly with licensing fees slashed in half, enabling more operators to set up Web sites and grab a share of the more than $1.5 billion wagered annually over the Internet.

The move toward online casinos stalled in the lower house earlier this week when a companion bill outlining licensing fees failed to get a required two-thirds majority. The sticking point was a proposed two-year fee of $1 million, which would have limited the field to only the largest Las Vegas-based operators.

Two days of politicking and negotiations with gaming industry lobbyists resulted in an agreement to combine both measures into one bill that calls for a two-year fee of $500,000. Operators also will pay the 6.25 percent statewide gaming tax on revenues. Equipment and systems manufacturers will pay fees up to $250,000 but were appeased by having their tax obligation reduced to 6.25 percent from a sliding scale that ranged as high as 12.75 percent.

The new bill now heads to the Senate, where it is expected to pass before the end of the legislative session on June 4.

It is estimated that online wagering will top $6 billion in the next few years. Nevada’s gaming industry believes it can capture the lion’s share of that by trading on the lure and name recognition of Las Vegas, home of many of the most famous casinos in the world. But once the bill is signed into law by Gov. Kenny Guinn, it may take as long as two years before any gaming sites are up and running.

Legality is a major hurdle. The Assembly bill stipulates that prospective gaming sites comply with state and federal law. Some states have been aggressive in their opposition to Internet casinos. Federal law is not entirely clear. While the courts have given conflicting opinions, the Justice Department has prosecuted U.S. citizens involved in taking cyber bets from offshore havens in the Caribbean. Congress is also considering at least one bill to effectively ban Internet wagering.

Aside from the legal issues, the biggest task facing Nevada’s regulators will be finding technology that ensures the games are secure and reliable and filtering mechanisms that prevent minors from accessing them. Also, the legislation restricts Nevada’s sites to taking bets from players in jurisdictions where online gambling is legal, so the sites will have to be able to identify players remotely and track the locations of personal computers around the world.