Nevada Approves Internet Gambling

C A R S O N   C I T Y, Nev., June 4 , 2001 -- The Silver State has become thecyberstate as Nevada lawmakers today voted to permit Internetgambling by casinos there.

Legislators approved the law even though the Justice Departmentsays Internet gambling is illegal. State officials say courtchallenges could change the federal government's position.

Experts estimate that revenues from Internet gambling — largelyconducted by offshore companies because of the U.S. ban — reached$1.5 billion last year and could reach $6 billion by 2003.

To ensure Nevada's expansion into Internet gambling moves aheadsmoothly, the state Gaming Control Board and state GamingCommission must first draft and adopt rules governing suchgambling.

Those requirements would include assurances that minors wouldn'tbe able to play. Also the games couldn't be conducted from statesthat prohibit gambling.

Race With New Jersey

Some in New Jersey wanted to beat Nevada into cyberspace, but anInternet gambling bill introduced in the New Jersey Legislature inJanuary that would permit casinos in that state to offer blackjack,roulette, slot machines and other games over the Web is stuck incommittee and unlikely to see action before upcoming summer break.

In Nevada, AB466, which moved to Gov. Kenny Guinn for signatureon a 17-4 state Senate vote, began as a uniform statewide work cardsystem for casino workers. The Internet gambling provisions wereamended into the bill after an initial plan for such gambling diedin the Senate.

Proponents said the earlier version, AB578, was a victim ofpolitical maneuvering. Casino lobbyists — in another of theirnumerous legislative successes this session — followed up with moremaneuvering to revive the idea.

Opponents included Sen. Terry Care, D-Las Vegas, who said a$500,000, two-year licensing fee for Internet gambling makes itimpossible for small casinos and entrepreneurs to participate.

"What this is asking us to do is to legislatively sanction amonopoly for an exclusive few that has always prided itself on thecompetitive nature of the marketplace," Care said.

Fee for Reputable Business

Senate Judiciary Chairman Mark James, R-Las Vegas, said the$500,000 fee ensures that reputable companies undertake Internetgambling.

Hotel-casinos with unrestricted gambling licenses could apply toconduct Internet gambling, posting the $500,000 fee when applyingfor two-year licenses.

A manufacturer of an interactive gambling device would pay a$250,000 license fee; a $100,000 fee would be assessed against amanufacturer of equipment associated with a gambling device; and a$50,000 fee would be charged for a license of a manufacturer ofperipheral equipment.

Casinos would pay a 6 percent tax on the gross win from theInternet.