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October 30, 2014

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Bally on track for first online gaming license in U.S.

The state Gaming Control Board has given preliminary approval to Bally Technologies Inc. to become the first licensed Internet gaming company in the United States in what is seen as a wave of the future in the casino industry.

Board Chairman Mark Lipparelli called it "another step forward but it's not the last," as the three-member board unanimously supported the application of Bally, a longtime supplier of gambling equipment.

John Connelly, vice president of business development for the company, said 50 casinos, many of them in Nevada, are interested in buying or leasing what he called Bally's "infrastructure" system to permit players, using their mobile phones and computers, to tie into casinos to make wagers.

Because of a federal law, bets will only be taken inside Nevada. And the system must ensure that no one under 21 years old is permitted to play.

Depending on what the casinos want, they will be able to use systems for table games, slot machines, poker, bingo and sports betting.

Bally attorney Mark Lerner said Nevada enacted the online gambling law a decade ago and many states are now getting ready to pass similar laws. "Nevada is committed to the future," he told the board.

Final approval must be received from the state Gaming Commission that meets June 21 in Las Vegas.

But it will be a while before such interactive Internet gambling is put into operation. Connelly said there must be testing to ensure the play is limited to Nevada and that juveniles are prohibited from betting.

Connelly said the Golden Nugget in Las Vegas is operating a free Internet poker game available outside Nevada. He said there have been 1,056 players who have registered. It is allowed to operate because it is free.

Connelly sees a great expansion from players with hand-held devices. He said the average use of these units now is 2.7 hours a day.

Lerner told the board that Bally purchased the online technology from Chiligaming, based in France. It did not buy the company, he said, but did hire some of the executives.

And several times, he said investigation by Bally did not find any case where Chiligaming illegally accepted wagers from the United States.

Connelly said 85 percent of the online users have never been to a casino.

Connelly said it will be up to each casino to determine how to collect the revenue from online players.

Chairman Lipparelli said this would be the first Internet gaming license issued in the United States if the commission approves. He said Bally "is a well-known company."

Lipperalli disclosed he was an executive at Bally several years ago but he has no current interest in the company. He said he intended to vote on the application.

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