May 01

Nevada officials to hold

LOS ANGELES, July 11 – Nevada gaming officials will host two days of expert panels later this month in their first effort to understand the issues they will face if and when online gaming becomes legal in the U.S., the chairman of the state’s gaming commission said on Thursday.

The forum, which begins July 31, will occur about a month after Nevada passed legislation authorizing its gaming regulators to set up a framework to oversee online gambling.

The legal status of such gaming is a federal issue, and is still being debated in the country’s court system and in the CongressBut if and when online gaming is determined to be legal, the Nevada law paves the way for the state to become one of the first to allow gambling over the Internet.

“We would have four or five panels (at the forum), one of which would be a legal panel,” said Brian Sandoval, chairman of the Nevada Gaming Commission, which is organizing the event expected to attract worldwide media attention.

Other panels would address:

— Ensuring that online gaming does not occur across state borders, which could violate interstate commerce laws;

— Making sure minors cannot gamble over the Internet;

— The economic impact of online gaming;

— The security of online gaming systems and preventing their use for illegal functions like money laundering; and

— Issues involved with problem gambling;

Mar 14

New Jersey Bill

The new bill that would permit Atlantic City casinos to offer Internet gambling contains strong provisions for protecting playersThe bill was filed last week two Republicans in the New Jersey Assembly, the state’s lower house.

The bill would legalize what it calls “remote live gaming.” That means the casinos could use streaming video to let players from all over the world gamble on real, live table games in real timeIt would not legalize betting on computerized slot or video poker machines, nor sports betting.

Current New Jersey law requires that casino gambling take place within the Atlantic City casinos.

The new bill would require that remote gamblers be at least 21 years old and residents of a jurisdiction in which it is legal to engage in remote live gaming.

Experts disagree about whether existing technology can block access to gaming sites minors or residents of jurisdictions where online gaming is illegal, but the sponsors of the New Jersey bill – Joseph Azzolina and Nicholas Asselta — seem to have no doubts.

“Our legislation would extend the arm of the law into cyberspace utilizing available technology to screen out minors or persons attempting to play a game from a prohibited jurisdiction,” Asselta said in a press release.

The bill says that the New Jersey Casino Control Commission would issue regulations specifying what types of proof would be required to document the age and residency of remote gamblers.

People who make false statements when they apply for a remote account may be subject to prosecution, the bill statesHowever, it’s not clear that New Jersey would have the legal authority to prosecute citizens of another state or country.

Anyone on the list of people who are excluded from Atlantic City casinos will not be permitted to have a remote account.

The bill forbids credit gambling on remote live gamesIt says that casinos may not accept wagers that exceed the funds already deposited in a remote account.

A remote account could be funded check, money order, wire transfer, credit or debit card, transfer from a “stored value card” or other means approved the Control Commission.

Stringent Player Protection Provisions

The player protection measures would be among the strongest in the worldFor example, the casino would be required to send a check or electronic transfer payment within three business days of the receipt of a proper withdrawal form from the player.

The casino would have to make available to remote account holders a display of the current amount of money in the account, the money the player has won or lost during the current session and the details of all previous sessions, including the date and time of play and the amounts won or lost.

In addition, the display would have to include the complete rules of the Control Commission regarding the games and remote gaming procedures, as well as the approximate odds of winning each wager.

To help problem gamblers, the Web sites would have to continuously display a phone number for assistance to problem gamblersThey would have to provide a method for gamblers to: set their own loss limits and the length of time they would be barred from playing once they reached those limits, limit the maximum size of any single bet, and temporarily suspend remote gaming for a set number of hours or days.

The casino would not be allowed to send mail or email promotions to a remote account holder during the time that the player was under a self-imposed suspension.

Also, the Control Commission would be required to determine an amount of losses a remote gambler that would trigger a required notice, mail and email, from the casino to the player listing all of the player’s winnings and losses and giving information for assistance to problem gamblers.

Apr 25

Pros and Cons

Nevada may soon regulate Internet gambling and allow land-based casinos like Caesar’s Palace and MGM Grand to operate online casinosWhat can players expect when gambling at Nevada-regulated Internet casinos and how will these casinos be different from existing unregulated, offshore Web casinos?

Let’s look at a few of the possible pros and cons of gambling at an Internet casino regulated the Nevada government.

Pro – Cash transactions will be secure and payouts assured.

Con – Winnings may be taxable and reported to the IRS.

Pro – Casino software will be strictly tested to assure randomness and fairness.

Con – Players may be required to jump through hoops to verify their age and location before they playThis could involve faxing your driver’s license to the casino or even attaching a Global Positioning System (GPS) to your computer.

Pro – Minors will be effectively screened out.

Pro – Casinos may be required to meet a minimum payout on slot machines.

Pro – Players will earn loyalty points they can use on their next trip to Las Vegas.

In the end, most players will appreciate the security and trustworthiness of Nevada-regulated Internet casinos, but the taxation policy and onerous sign-up procedures may force some players to seek unregulated, offshore gambling action.

Mar 28

Investors punish gaming

Investor jitters over the Las Vegas gambling industry’s prospects in 2001 continued after the state Gaming Control Board reported Wednesday that Nevada’s gaming win fell 3.2 percent in November, its second decline in three months.

Gaming investors reacted continuing their sell-off of the city’s largest casino operatorsOn Wednesday, Mandalay Resort Group dropped 94 cents to $20, Park Place Entertainment Corpfell 44 cents to $10.06, Harrah’s Entertainment Incretreated 81 cents to $23.88 and MGM MIRAGE lost 38 cents to close at $28.56.

But to gaming analysts, who have largely turned bearish on gaming’s prospects in 2001, the numbers were met with a shrugThey’re not interested in what happened in November 2000 — rather, they’re interested in where Las Vegas is going in the first months of 2001.

“Its effect on the stock prices is more psychological than anything,” said Daniel Davila, gaming analyst with Hibernia Southcoast Capital“I would caution people from putting a whole lot of importance on what happened in NovemberWhat happened two months ago has already been factored into the price of the stock.”

Declines aren’t surprising, Davila said, because Las Vegas room rates had reached record highs, and the city’s gaming industry had been enjoying a boom in visitation.

David Anders, gaming analyst for Merrill Lynch, noted that investors were already concerned reports last week that Park Place, Aztar Corpand Isle of Capri Casinos Incwould all miss fourth-quarter earnings estimatesAnd Boyd Gaming Corpsaid it would post a loss.

“(The November report) is obviously not positive, and we’re still concerned bout the impact of a slowing economy on Las Vegas in the first and second quarters of 2001,” Anders said“But I don’t know if you can assume a direct correlation between the Las Vegas numbers (in November) and that outlook.”

On the Strip, gaming win fell 7.7 percent to $398.6 million, compared to a staggering 35.8 percent increase in win in November 1999That breath-taking pace of a year ago was difficult to maintain, analysts said.

Moreover, Anders said it is likely tough comparisons will continueIn the first quarter of 2000, Strip gaming win was up 13.3 percent; in the second quarter, it was up 10.5 percent.

These tough comparisons follow the city’s recent history, which saw growth level off after a rapid period of new casino openings ends, said Andrew Zarnett, gaming analyst with Deutsche Banc AlexBrownOther factors placing pressure on Las Vegas include the bankruptcy of National Airlines, the effect of increased competition for California Indian casinos and the possibility for heavy electric bill hikes to millions of Californians.

“We believe the market will have difficulty (in comparing to) the prior year … growth in 2001 may be anemic,” Zarnett said“Overall, those operators with triple-A locations will continue to benefit from stronger resultsThose away from the Flamingo-Las Vegas Boulevard intersections, such as Mandalay Bay, will experience (room rate) pressure.”

Still, Zarnett doesn’t see much confirmation of the downturn in NovemberHe noted that high-end play, measured baccarat win, declined more than 20 percent.

“If you back out the high-end play, you’ll find that the Las Vegas Strip was basically down only slightly versus the previous year, which was a very strong comparison,” Zarnett said.

Though lacking confidence in 2001 growth, analysts noted that the November numbers probably aren’t a signal that December will also be weakMost companies, at least Strip operators, have indicated December was a very strong month — in a meeting of the state Gaming Control Board Wednesday, Mandalay President and Chief Financial Officer Glenn Schaeffer indicated the company enjoyed a very strong New Year’s weekend, surpassing company expectations.

“The room rate surveys indicate December was a reasonably good month for them, and they were one company that really suffered from mismarketing of the millennium weekend last year,” Anders said, which should result in favorable comparisons in December 2000.

“Many operators are saying that the fourth quarter shaped up reasonably well for them, which tells me December must be have been a fairly strong month (in light of November weakness).”