Nevada Gaming Commission considers Internet poker regulatory proposals

In a statement pertaining to the draft regulations, Board Chairman Mark Lipparelli noted that “[t]he technology supporting [internet poker], while not perfect, has improved dramatically since its introduction.  Similar to our land-based requirements, Nevada will establish high standards giving players as much confidence as possible in the entities and technologies that might eventually gain approval,”

The regulatory proposals, if enacted, would add Regulation 5A (Operation of Interactive Gaming) and amend Regulation 3 (Licensing: Qualifications), Regulation 4 (Applications: Procedure), Regulation 8 (Transfers of Ownership; Loans) and Regulation 14 (Manufacturers, Distributors, Operators of Inter-Casino Linked Systems, Gaming Devices, New Games, Inter-Casino Linked Systems, On-Line Slot Metering Systems, Cashless Wagering Systems and Associated Equipment). 

The proposed regulations are available on the Board’s website at www.gaming.nv.gov and will be the subject of a public regulatory workshop hosted by the Board.

Proposed Regulation 5A would govern the operation of interactive gaming: 5A.020 defines, amongst other things, the requirements for an “interactive gaming account,” and which activities fall within the scope of an “interactive gaming service provider” and “operator of interactive gaming.” “Poker” is defined as “the traditional game of poker, and any derivative of the game of poker as approved by the chairman and published on the Board’s website, wherein two or more players play against each other and wager on the value of their hands.  For purposes of interactive gaming, poker is not a banking game.”

Besides, Proposed Regulations 5A.030, 5A.040, 5A.050 and 5A.060 address the necessity for licensure, investigations and applicable fees for operators of interactive gaming systems.  Proposed Regulation 5A.070 outlines the minimum internal controls required for operators of interactive gaming, including administrative, accounting and audit procedures, system security, player identification, verification and registration, confidentiality of player accounts and player information, system testing and responsible gaming.

Regulation 3 – Licensing: Qualifications. The proposed amendments to Regulation 3.100 add employees of “interactive gaming” operators and “service providers” to the list of qualifying employees that must be identified bi-annually.

Regulation 4 – Applications: Procedure. The proposed amendments to Regulation 4.030 amend the definition of a manufacturer’s license to include a manufacturer of interactive gaming systems, and add definitions for an “operator of interactive gaming license” to mean “one which authorizes the holder to, from Nevada, engage in the business of operating interactive gaming” and for a “service provider license” to mean “one which authorizes the holder to act as a service provider and includes an interactive gaming service provider license.”

Regulation 8 – Transfers of Ownership: Loans.  The proposed amendments to Regulation 8.130 amend the term “licensee” to include holders of an operator of interactive gaming license and a service provider license.

Regulation 14 – Manufacturers, Distributors, Operators of Inter-Casino Linked Systems, Gaming Devices, New Games, Inter-Casino Linked Systems, On-Line Slot Metering Systems, Cashless Wagering Systems and Associated Equipment.

The proposed amendments to Regulation 14.010 amend the definition of “cashless wagering system” to include the hardware, software, communications technology, and other associated equipment used to facilitate wagering on any game or gaming device including mobile gaming systems and interactive gaming systems. 

The amendments also add a definition for “equipment associated with interactive gaming” to mean “associated equipment as defined within NRS 463.0136” and a definition of “interactive gaming system” to mean “the collective hardware, software, communications technology, proprietary hardware and software used by an operator of interactive gaming to operate interactive gaming.”

The components of an interactive gaming system must be located in the State of Nevada except as otherwise permitted by the chairman of the Board or his designee.  The definition of “manufacture” has been amended to include proprietary software or hardware.  A definition of a “manufacturer of equipment associated with interactive gaming” has been added to mean “any person that manufacturers, assembles, or produces any equipment associated with interactive gamin.” Finally, “proprietary hardware and software” is defined as “hardware or software specifically designed for use in a gaming device including a mobile gaming system and interactive gaming system.”

The proposed amendments to Regulation 14.020 state that a manufacturer of equipment associated with interactive gaming for use or play in Nevada may be required by the Commission, upon recommendation of the Board, to file an application for licensure as a manufacturer of equipment associated with interactive gaming.  All manufacturers of associated equipment are required to register with the Board using such forms as the chairman may require or approve.

Regulation 14.025 has been added to provide that applications for a manufacturer or distributor license or for a finding of suitability to be a manufacturer of equipment associated with interactive gaming shall be subject to the application and investigative processes and fees established pursuant to Regulation 4.070.

The proposed amendments to Regulation 14.040 require that all gaming devices submitted for approval must display the amounts to be paid on winning wagers, any rake-off percentage or any fee charged to play a game, and any monetary wagering limits for games representative of live gambling games.