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South Point Casino Snags First Nevada Operator Approval For Internet Poker

Company Looking To Offer Real-Money Games This Fall

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Since at least 2011, South Point Casino has wanted to operate Nevada’s first real-money Internet poker site. On Wednesday, the company kept pace with that goal by snagging its first round of formal, public approval by state gaming regulators.

The Gaming Control Board’s three-member panel voted to recommend licensure for South Point Poker LLC to exist as an operator, manufacturer and service provider in the web poker business. This industry will be limited to just within Nevada’s borders at first.

“Michael Gaughan [South Point’s owner] had the vision to embrace online gaming from the beginning,” an attorney for the company told regulators. “South Point Poker is optimistic it will be the first to take real-money bets later this year.”

The company said it has “unique, patent-pending” technology for geo-location — a key issue for an intrastate market to work. For example, neighboring Utah has banned the game.

The company also highlighted the fact that it will allow online poker cash deposits and withdraws at its in-person cage. The company said it’s “very excited and proud to have built a home-grown product — launching this fall, maybe.”

After the Nevada Gaming Commission gives the final OK later this month and awards the license, technology inspection will need to be completed. The company said Wednesday that it has finished its “preliminary review” with a third-party lab. The company added that it’s just a week away from entering its second and final review.

Control Board Chairman Mark Lipparelli said he would like an “administrative review” before the company flips on the switch. Regulators want one last look.

South Point Poker’s application is unique because it can offer online poker in-house. In Nevada, brick-and-mortar casino companies are the only entities that can operate the games, but getting the technology to do so is the hurdle. Some Nevada casinos will be relying on partnerships with existing foreign-based sites.

Thanks to the decision to go in-house, South Point Poker looks to be ready before any other duo itching to get involved with online poker. Some in Nevada think the potential player pool is too small to support a healthy industry, and that compacts with other states or nations are crucial. Rick Kulis, VP of Internet Gaming for South Point, told Card Player in December 2011 that his company believes an intrastate model to be doable.

Kulis also said that while the focus is on intrastate for now, the fact that the company has its own software is an advantage for expanding into other markets. In other words, South Point Poker can expand to any legally available jurisdiction with fewer hiccups than its competitors.

For now, South Point Poker will have to reserve its real-money play for Nevada. Delaware is the only other state with legalized online poker, but its games will be under the control of the state lottery. Some in California want the game licensed and regulated, but their efforts have always, thus far, met fierce opposition and never amounted to much.

South Point Poker has existed as a nationwide, third-party free-play site since the fall of last year, a launch which occurred around the same time that the company submitted its real-money request to Nevada regulators. South Point Poker was one of the first five companies to apply. The real-money site will be separate from the free-play site.

Update: 10:15 a.m. PST

Monarch Casino and Resort, Inc. also got approval to be an operator of Internet poker later in Wednesday’s Control Board hearing. However, the casino doesn’t have in-house software or a partnership lined up to offer games. It’s far behind South Point Poker.

Payment processing company Global Cash Access, Inc. also received Control Board recommendation Wednesday, but unlike South Point Poker and Monarch Casino, it will be a service provider only in the online poker industry.

These three entities are looking to join International Game Technology, Bally Technologies, Inc. and Shuffle Master, Inc. as Nevada licensees for web poker. The latter group was awarded their respective licenses earlier this summer.

Follow Brian Pempus on Twitter — @brianpempus