AB 296 Moved out of Committee by Unanimous Vote

16 April 2001
Today saw the Nevada Assembly, through AB 2906, step closer toward legalizing Internet casino gambling within the borders of the United States. The state Assembly Judiciary Committee this afternoon spent nearly an hour discussing two amendments to the bill before unanimously voting to accept both.

The bill next heads for a floor vote later this week. If it passes, it would be sent to the Senate, where it could face further amendment before a vote, the last step before going to Governor Kenny Guinn's desk for a signature.

Much of today's discussion centered on an amendment that would broaden the definition of what kinds of gaming establishments would be eligible to operate and offer e-gambling services. The restrictions were drawn so that facilities in smaller Nevada counties would need to meet different qualifications than those in larger counties.

In addition, the amendments would make manufacturers (such as software developers) subject to the same licensing provisions that currently apply to manufacturers of gaming devices.

Another change would make Internet gambling debts enforceable. The amendment reads, "Debts incurred by patrons to license interactive gaming operators are valid and may be enforce by legal process."

One of the most hotly debated points was raised by committee member Barbara Buckley, who questioned what the status of federal legislation is regarding Internet gambling issues. Buckley admitted that she "would like us (Nevada) to do it first if it all works out." As such, she asked whether Nevada would legally be able to offer Internet gambling.

The answers to Buckley's questions varied. Some legal experts believe that the recent U.S. District Court decision regarding credit card gambling debts is the best legal definition of what types of Internet gambling are not illegal within the U.S. (For further details, see Gamblers' Case Against Visa, MasterCard Dismissed.) In dismissing the case, Judge Stanwood R. Duval Jr. said that the defendants had not violated the Federal Wire Act. He explained,

"Even a summary glance at the recent legislative history of internet gambling legislation reinforces the Court's determination that internet gambling on a game of chance is not prohibited under 18 U.S.C ยง 1084."

"Comparing the face of the Wire Act and the history surrounding its enactment with the recently proposed legislation, it becomes more certain that the Wire Act's prohibition of gambling activities is restricted to the types of events enumerated in the statute, sporting events or contests. Plaintiff's argument flies in the face of the clear wording of the Wire Act and is more appropriately directed to the legislative branch than this Court."

Nevada Gaming Control Board Chairman Dennis Neilander, however, says that the court's decision was not a strong enough precedent to distinguish that the federal Wire Act making interactive gambling services, including games of chance, illegal.

Nevertheless, AB 296 does give the Board the ability to determine whether the Nevada legislation would be legal under all applicable law. As such, Neilander welcomed the chance to examine the legal ramifications of interactive gambling licensing.

Click here to read the amendments to AB 296.