Regulators concerned about betting kiosks

Monday, April 26, 2004 | 10:44 a.m.

CARSON CITY -- State gaming officials are concerned that rapid advances in technology could generate problems in regulating the Nevada casino industry.

Dennis Neilander, chairman of the state Gaming Control Board, said last week that technology is becoming more affordable and there are policy questions to answer.

The issue came up at the meeting of the state Gaming Commission that approved the application of LeRoy's Horse and Sports Place to install four more kiosks to allow bettors to place their wagers through terminals.

And VirtGame Corp., a software development company based in San Diego, is testing kiosks in bars in Las Vegas. The kiosks allow wagers on horseracing and sporting events.

Peter Bernhard, chairman of the Gaming Commission, questioned whether casino games may be the next to be placed on kiosks.

Neilander said there has been an increase in the number of the electronic systems that make it more convenient for the customer to gamble.

Tim Lockinger, chief financial officer of American Wagering Inc., which operates LeRoy's Horse and Sports Place locations, said it placed its kiosks in Ely and Jackpot and is going to install one in Beatty. It may put units in Fallon and Lovelock. He said this brings race and sports betting to parts of rural Nevada where there are no books that are staffed.

"The customer acceptance is very good," Lockinger said. "There have not been any major problems."

The player inserts his cash, picks the horse or the team and then receives a ticket in return. If he wins, he collects from the cage at the casino or he can leave the winnings in the kiosk to make further bets.

The largest bet so far, said Lockinger, was a $1,000 bet on the Super Bowl. The machines accept up to $3,000 in wagers before they shut down and have to be restarted.

Lockinger said any plans to put casino games on the kiosks would need a change in the law.

The commission approved LeRoy's placing kiosks in the Stagecoach Hotel and Casino in Beatty, the Lake Mead Lounge in Henderson, the Klondike Casino on the Las Vegas Strip and the Klondike Sunset Casino in Henderson. The kiosks have yet to be installed.

VirtGame Corp., which received a permanent license from the commission Thursday, has developed a kiosk that is being tested in taverns in Clark County. Under the system, a bar patron can use the kiosk to place bets. But the bettor must have money in an account in the casino where the bet is placed.

The kiosk that is a joint venture of VirtGame Corp. and United Games has access to the latest information and odds from various casinos.

Tony Cabot, attorney for VirtGame, said kiosks are an extension of telephone betting on sports and horseracing. A person with an account in a casino book can call in his or her bets.

Commissioner Art Marshall questioned whether this was a disadvantage to the sports and race books in the casino since the customer would not visit the casinos and therefore wouldn't spend additional money on site.

Cabot said the casinos that are tied into the system see this as "incremental revenue" or money they would not receive.

VirtGame charges a small fee for using the system, said Cabot. The taverns at this point do not receive any money. The VirtGame system is on trial by the state Control Board before it gets a permanent license.

VirtGame also developed software systems to be used in sports books and to put games of chance in slot machines. Bruce Merati, chief executive of VirtGame Corp., said the software has not been approved by state regulators yet.

Merati said he hopes the company will be able to realize a profit later this year with these systems. He said he "believes software technology will be more in the gaming business as time goes by."