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Nevada Gaming Hits 'Milestone' Toward Online Poker

Regulations Adopted for Independent Testing of Gaming Devices

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Nevada Gaming Commission on Mar. 22, 2012Musician Jimmy Buffett was awarded a gaming license at Thursday’s Nevada Gaming Commission hearing, but he didn’t headline the show. Instead, it was the state’s plans for having the nation’s first Internet poker industry.

The Commission made history in December 2011 by adopting online poker regulations, and it did so again on Thursday by finalizing rules for the companies that will be in charge of inspecting and certifying poker sites, as well as all brick-and-mortar gaming devices.

After 11 drafts of the regulation, the Silver State has its methods to utilize and oversee Independent Testing Labs. “We are going in a direction we have never gone before,” Gaming Commissioner Tony Alamo said.

Nevada has been trying to keep up with a rapidly changing gaming world.

“The world moves kind of fast. If you blink you are going to miss it,” Alamo added by quoting the film Ferris Bueller’s Day Off.

Chairman Peter Bernhard said that regulators never envisioned a day when Nevada would allow third parties to test gaming devices. Bernard called the hearing in Las Vegas a “milestone.”

Regulators will be outsourcing 100 percent of testing. As a result, 12 people have lost their jobs from the state’s technology division, according to department chief Jim Barbee.

The plan is to allow more companies to do business in Nevada, as well as expedite games to the marketplace.

888 will likely run its software on behalf of Caesars Entertainment. Both have already applied.Despite handing over control to the Independent Testing Labs, regulators will still have the role of putting the stamp of final approval on a gaming device. The labs will simply alleviate the in-house burden on technology issues.

Regulators have no idea how many Independent Testing Labs will exist in the marketplace. According to Control Board Chairman Mark Lipparelli, obtaining a license from Nevada will be “open and competitive.”

“No monopoly,” Alamo said.

Lipparelli added that more testing companies will seek entry as Nevada moves toward “networked games,” especially when the state’s casinos can offer online poker interstate or to other nations.

Card Player broke the news in the middle of February that Gaming Laboratories International and BMM Compliance were the first companies to apply as Independent Testing Labs.

The rules for labs become effective on May 1, 2012.

In the meantime, Lipparelli said that Nevada will likely “hit some bumps in the road over the next six months.” Regulators will run a tight ship for the labs, and according to Lipparelli, a “very powerful market mechanism” exists to weed out the labs that don’t perform well.

Commissioner John Moran called it “self-policing.”

Online gaming also had relevance when regulators were discussing granting the state’s first-ever service provider license to Global Cash Access, Inc. In addition to its brick-and-mortar plans, company chairman Edwin Kilburn said they are “watching [online gaming] very closely.”

Casino giant MGM Resorts also has already applied to operate web poker.Service providers will assist a Nevada casino — which is the only entity allowed to actually operate online gaming — in the business of taking wagers.

According to its website, Global Cash Access processed more than 90 million transactions and dispensed more than $18.9 billion in cash in 2010. It provides products and services to more than 1,100 gaming establishments worldwide.

Along with effectively legalizing online poker in summer 2011, the Nevada legislature also passed a bill to allow companies like Global Cash Access to get in the game and keep the state out in front of advancing gaming technology.

All the legislative and regulatory developments are a buildup toward Nevada seeing its first casino licensee take real-money wagers in cyberspace. Despite the aggressive progress, regulators are still tight-lipped on when poker will finally go online.


Follow Brian Pempus on Twitter — @brianpempus