Jeff Simpson sees dangerous trend in Nevada’s inaction on growing online action

Sunday, July 23, 2006 | 7:41 a.m.

Nevada gaming regulators need to get tough, in a hurry.

The state's Gaming Control Board takes great pride in being strict enforcers of the rules that govern Nevada gambling.

And they are - for the most part.

But the meteoric growth of the poker business has blinded the gaming industry's cops, and they seem unable to deal with the new realities that have accompanied the rise of Internet poker.

Playing poker online for money is illegal in Nevada, according to state law, and the federal government says it is illegal everywhere in the United States, a stance the online poker business hopes the courts will overturn.

Nevada gaming regulators originally took a tough stand against Internet poker.

They forced prospective gaming license applicants to sell their ownership stakes in online casinos. They prohibited poker tournaments in state casinos from licensing online poker rooms to conduct official satellite tournaments that send winners to play in Nevada events.

They did so because almost every top Web poker room accepts bets from the United States, including Nevada.

Regulators considered the poker Web sites to be lawbreakers.

That was when the online poker business was still relatively small. But after Tennessee accountant Chris Moneymaker parlayed his $40 PokerStars satellite victory into a (non-officially sanctioned) entry into the 2003 World Series of Poker championship event at Binion's Horseshoe and took down the top prize of $2.5 million, the online business exploded.

Online poker sites ran countless commercials on the dozens of hours of televised poker shows available each week.

The revenue stream fueled more poker TV shows. With Moneymaker's win and the TV exposure, Web poker boomed, as did revenue in Las Vegas poker rooms and the tournaments they held.

The World Series of Poker championship event drew 839 entries in 2003, a number that jumped to 2,576 in 2004, 5,519 last year and is expected to reach 8,000 or more this year.

Those skyrocketing numbers have been driven by online sites.

One week ago PokerStars held a single online satellite tournament that will send an incredible 234 players into this year's WSOP $10,000-entry championship event. Dozens of other sites will send thousands more entrants.

What I find astonishing is that the Gaming Control Board allows the properties hosting major poker events to ally themselves so closely with poker Web sites that invite players to break the law.

At the WSOP, now under way at the Rio, Harrah's sold official hospitality rooms just steps away from the poker competition to several online poker rooms: Doyle's Room, Bodog and Ultimatebet. Other sites rent luxurious suites at the host hotel, the Rio.

From the felt tops of the WSOP poker tables, which feature a PartyPoker logo, to World Series media director Nolan Dalla, also a top spokesman for PokerStars, the incestuous relationship between legal Nevada casino poker and illegal online poker has never been clearer.

Harrah's can get away with the close partnerships because the online operators use their Web sites' "dot net" suffix, meaning that they call themselves by the names of their "educational" sister sites that offer free play instead of poker for money.

Ultimatebet.com, where you can bet, with a wink becomes Ultimatebet.net, where you can't. So Harrah's isn't technically partnering with illegal operators, and regulators aren't technically allowing a rule-breaking partnership.

Control Board Chairman Dennis Neilander says the distinction between the dot-coms and the dot-nets matters and that regulators don't see a problem with the dot-net marketing at the WSOP.

He's wrong. The dot-net distinction shouldn't make a difference. Nevada casino operators shouldn't be partnering with illegal online casino operators - or their shadow sites.

It's time for Nevada regulators to say enough is enough and prove they still have the backbone to stand up to the big money of online casinos.