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April 17, 2014

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IGT gets initial approval for Internet gaming license

The state Gaming Control Board has recommended approval for an Internet license for International Game Technology, which had stressed it is running online gaming already in other regulated countries.

It was the second license in two days approved by the Control Board, and they are the first issued in the United States by a regulation authority. Bally Technologies was cleared for approval on Wednesday.

Board Chairman Mark Lipparelli said both companies must submit their technologies to the state for testing to see if they work. They must, among other things, show that only Nevadans and those 21 years old and older are able to play the Internet games.

Robert Melendres, executive vice president of IGT, said interactive gaming will help Nevada remain in the forefront of the gaming picture.

He said 400 employees will be working on the online technology and business.

He stressed IGT does extensive investigations to determine if interactive gaming is allowed in countries before setting up operation. And it also looks to see if the regulatory system is tight. This has caused IGT to forego investments. "It placed us at a disadvantage," said Melendres.

IGT in the early 2000s purchased WagerWorks, an Internet gaming company. It has operations in foreign markets but is focused on the United Kingdom.

Some of the security measures were outlined by Crystian Terry, director of casino operations. A player who wants to gamble on the online system must first supply his name, date of birth and residence. These are independently verified through public records and other documents.

His financial position is also verified, and there are strict anti-laundering policies set in place, Terry said. And it has a program to help problem gamblers.

The board questioned IGT about its purchase of Entraction, an Internet poker system with 4 million customers. Entraction had been illegally accepting wagers from the United States. IGT said it investigated the background of Entraction before the purchase but did not uncover the U.S. betting. It was stopped and it was determined it was less than 1 percent of the Entraction business.

Melendres said IGT is working with the federal Department of Justice to resolve if there will be any penalty.

He also detailed the operation of Double Down, the free Internet gambling site available across the nation. It has 1.3 million customers who are able to play numerous games ranging from poker to casino games to slot machines.

Since it is free, it is not barred by federal regulations. Melendres said this opens up gambling to 800 million users on Facebook.

Before the unanimous board vote, Lipparelli said there will be many more Internet applications filed and some "will have an imperfect history." But he praised IGT for its diligence in locating only in places that permit online gambling and have a strict regulatory system.

The state Gaming Commission meets June 21 in Las Vegas to take final action on the application.

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