Inside Asian Gaming

April 2011 | INSIDE ASIAN GAMING 37 Gambling and the Law I nternet gambling operators who took bets from residents of the United States received some surprisingly good news last month. First, Nevada regulators approved a partnership between Caesars and 888. Then Steve Wynn announced he will work with PokerStars in the hopes of setting up PokerStarsWynn.com, to take online poker bets from US players. The decision about 888 is surprising. Although it abandoned theAmericanmarket when the Unlawful Internet Gambling Enforcement Act was passed in 2006, it used to welcome American poker players. The federal Department of Justice had indicated itwanted toprosecute anyonewho ever operated Internet poker rooms open to Americans players, even if they had stopped taking bets from the US. Nevada casinos and regulators had taken the same position, that online poker was illegal gambling. Yet both the Nevada Gambling Control Board and the Nevada Gaming Commission declared 888 suitable to do business with one of its largest licensees, Caesars Entertainment. The decision by Wynn was even more startling, because PokerStars still takes bets from residents of the US. It is also significant becauseWynn had been absolutely opposed to all Internet gambling only a few years ago, and his major focus is on Asia. If an operator as smart as Steve Wynn thinks now is the time to push for legalising online poker, then now might very well be the time. But what about PokerStars’ supposed ongoing violation of American gambling laws? There is a precedent that indicates Wynn may be correct in thinking that is not going to be a problem. The two major arguments against licensing a company that is presently taking poker bets from America is that it is involved in illegal gambling, and its illegal gambling gives it an unfair advantage through customer lists and brand name recognition over law-abiding gaming companies that haven’t been taking online bets. These arguments seemed to win the day when wide-open licensing was under consideration in France. French lawmakers at first took the position that any company that took bets from residents of France could not get a licence. Then they proposed an official ‘time out’. Operators would only be able to apply for a licence after removing themselves completely from the French market for 18 months. This idea of a ‘time out’ was included in the unsuccessful bill introduced by Senator Harry Reid during the December 2010 lame duck session of Congress. It was thought at the time that Caesars, then named Harrah’s, had wanted to eliminate its competition during the all-important start-up period once Internet gambling was made legal. Harrah’s had never taken online bets from the US. But, in the end, both banning and a ‘time out’ lost to what amounts to a general amnesty. French authorities were won over by the counter-arguments: It was unclear under French and particularly European Union law whether online poker operations licensed by other members of the EU could be prosecuted. So, it was particularly unfair to penalise operators who had not been convicted of anything. More importantly, French gaming regulators and operators became convinced that they needed the experience and expertise of the largest Internet gaming companies. This echoes the decision made in the early 1950s by Nevada regulators that they would ignore convictions for illegal gambling by applicants for the first state licences. The theory was that since all casino gambling was illegal in the US, only criminals had the experience to run casinos. There actually is some evidence that only Amnesty for Online Operators? By Professor I. Nelson Rose