Regulators OK 24-hour kiosks for sports betting

Friday, Nov. 22, 2002 | 11:08 a.m.

When NASCAR fans went to place their bets on their favorite drivers and races last year, many were upset to find out that Leroy's Horse & Sports Place operations in casinos across Nevada had closed early -- at 11 p.m.

American Wagering Inc., the parent company of Leroy's and also the state's largest provider of computerized sports betting systems to casinos, has developed a kiosk that allows gamblers to bet on horseraces, auto racing and other sporting events 24 hours a day, seven days a week.

"Sports books are pretty much dark at night," American Wagering Chief Financial Officer Tim Lockinger said. "(Kiosks) make it more of a 24-hour operation."

Nevada regulators Thursday approved a sports and race betting kiosk concept that works somewhat like an ATM. The kiosk, which wasn't named, offers larger casinos a chance to increase their sports betting volume by placing the devices in well-traveled casino areas. Smaller casinos also could benefit by relying less on manned sports book operations, which are more expensive to operate than kiosks, the company says.

American Wagering still needs regulatory approvals to conduct a field trial for the device, which could be launched in casinos across Nevada by mid-April.

The kiosks would compete with other sports betting devices already in place in Nevada but could become the first allowed anyplace on the casino floor. Putting a sports betting machine near more popular slot machines could boost play, Lockinger told commissioners Thursday.

Las Vegas Dissemination Co. -- a company that supplies Nevada's casinos with updated horseracing data -- offers kiosks that allow gamblers to bet on pari-mutuel races. And for the past two years, San Diego-based VirtGame Corp. has offered PC-based race and sports betting software to Nevada casinos. Last month the company obtained regulatory approval to become a licensed manufacturer and distributor in Nevada -- a first step in a process that would allow the company to launch kiosks and other betting devices that also offer traditional games of chance along with sports betting.

American Wagering's kiosks will use biometric, facial-recognition technology to match player data with their faces -- a feature that satisfies stringent rules that prevent minors from gambling. The machines also will only allow players to gamble up to $3,000 in cash per day, though an unlimited number of vouchers and winning tickets may be placed back into the machine for further play. American Wagering came up with the limit to satisfy federal rules governing money-laundering, Lockinger said. Casinos must typically document cash transfers of $10,000 or more with the federal government.

Kiosk makers have taken great pains to avoid the word "Internet" -- a contentious word that could open a legal can of worms -- in their licensing process. American Wagering's devices won't use an Internet connection to transmit data, Lockinger said. The kiosks are only approved for use in Nevada, though gamblers don't have to be state residents, he added. VirtGame's wagering system also falls within legal guidelines because it uses a private network connection, also called a "closed-loop" system, to transmit information. The company's systems also are only approved for use statewide.

Such distinctions have become vital to regulators because recent interpretations of the law have determined that Internet gambling across state lines is illegal under federal law. Regulators are exploring whether to regulate Internet gambling within Nevada, which could allow residents to place bets within the state.

American Wagering is working on future upgrades to the kiosks that would require a host of regulatory approvals before they ever come to market.

Sports betting systems could move beyond kiosks to include wireless devices -- like miniature personal computers -- allowing casino gamblers to place bets poolside, for example, the company said. Another device could allow players to place bets from their hotel rooms. Yet another version could double as a slot machine at which players could wager on casino games of chance.

The company also is exploring the possibility of adding features such as community information and the ability to make reservations for restaurants, shows and other local activities.

Separately, a casino received regulatory approval Thursday to expand by building a separate structure facing Industrial Road, a roadway parallel to the Las Vegas Strip and to the rear of many of the city's megaresorts.

In doing so, the Nevada Gaming Commission may have set a precedent.

Westward Ho, across the Strip from the Riviera hotel-casino, was approved to construct another casino building on its premises but will not need a second gaming license to run the property.

An earlier Nevada attorney general opinion on the matter calls for licensees to go through a full vote by the Gaming Control Board and the Gaming Commission before they would be allowed to expand their properties. Over the years casinos have been able to avoid a full vote and an additional licensing procedure by attaching casino buildings to one another.

A few years ago Park Place Entertainment Corp. attached its Paris Las Vegas casino to its adjacent Bally's Las Vegas property -- a complex that operates under a single gaming license originally granted to Bally's.

Despite past practice, no regulations specifically require casinos to be attached in order to operate under a single license.

Westward Ho may have been the first to break with tradition, commissioners said Thursday.

The casino decided instead to pursue its expansion before the gaming board and commission.

"I was reluctant to be moved from past practice. but I can't find any regulatory reasons to object," commission Chairman Peter Bernhard told Westward Ho President Hans Dorweiler and the casino's attorney, Preston Howard, before a unanimous vote.

Bernhard also said he would be reluctant to go as far as changing the regulations to specify what's required for separate building expansions.

"We will look at future applications on a case by case basis."

Separately, the commission voted to grant a two-year conditional gaming license for the owners of the Golden Phoenix hotel and casino in downtown Reno. Brothers Amin and Ally Visram purchased the former Flamingo Reno property from Las Vegas investor Shawn Scott last year. Commissioners only granted a conditional license over concerns about Scott's involvement in the deal. Scott was stripped of his Nevada gaming license years ago because of questionable accounting practices.

The Visram's company bought the property for $6.75 million, financing the purchase with a $6.4 million loan from Vestin Mortgage. The Las Vegas-based mortgage giant engineered a back-end loan to Scott for $800,000. The Visrams, who told commissioners they weren't aware of the deal with Scott until they signed off on the Vestin loan, must pay off Scott as soon as possible to maintain their gaming license.

Also Thursday, commissioners voted to approve gaming licenses for the Tuscany and Cannery casinos -- the only new, major casinos to receive approvals this year.