Internet gambling still faces obstacles

Friday, Feb. 22, 2002 | 10:54 a.m.

CARSON CITY -- There are still a number of hurdles that must be overcome before Nevada casinos can be allowed to participate in Internet gaming, a state official said Thursday.

Mark Warren, hired by the Nevada Gaming Commission as a research specialist for online wagering, said there "are a lot of unanswered questions," including whether the U.S. Department of Justice under President Bush would continue to hold the position that Internet gambling violates federal law.

The attorney general's office is researching federal and state laws on Internet gaming. Arguably, Warren said, online betting may be banned in all 49 other states.

A legal opinion is expected to be ready in the next month.

The state Gaming Control Board has not produced any draft regulations for Internet gaming. The law says the gaming regulators must have "reasonable assurance," that no bets would be taken from residents in other states where the Internet gaming is prohibited.

And there must be assurance that minors are not able to wager.

There are devices on the market, Warren said, that can match fingerprints or photos. And there are devices to detect a player's location with accuracy. But he cautioned that a software system "could be secure today but may not be in six months."

In addition, the state must come up with a policy on how to limit the play of potential problem gamblers, and how to keep them from hopping from one casino to the next once they reached that limit.

Commission Chairman Peter Bernhard and Gaming Control Board Chairman Dennis Neilander say they have talked with the Justice Department and will set up a meeting in the future to clarify its policy on Internet gaming in this country.

Under the Clinton administration, the Justice Department argued the Wire Act, passed in 1961, prohibited all wagering on the Internet. But proponents of online betting say the prohibition applies solely to Internet sports betting.

A federal district court in Louisiana ruled last year the law is applicable only to sports bets, not casino games. That decision is on appeal to the Fifth Circuit Court of Appeals.

"The Bush administration has not taken a position," said Warren, a former state deputy attorney general. There are presently four bills in Congress to outlaw or to limit Internet gaming, he told the commission.

In addition, Bush has said regulations must be written to guard against money laundering over the Internet.

Other areas that must be worked out include systems to handle player disputes and bets from other countries, Warren said.

If Internet gambling is illegal in other states, then the casinos may want to try it just inside Nevada. But there also would have to be regulations on any online betting.