Far Beyond Ridiculous

21 December 1999
The following article is an editorial perspective on the complaint filed last week by the Nevada State Gaming Control Board against American Wagering Inc. In short, the stance against online gambling in the United States has simply gone too far.

Interactive Gaming News has always taken a keen interest in well-established American land-based gaming companies with the foresight and, quite frankly, the guts to go after the Net betting market.

The likes of Hilton, Harrah's and Station Casinos have all flirted with succumbing to the "dark side" and other companies have their plans (believe me, they do), but Nevada sportsbook operator American Wagering Inc. (AWI) is the only company that's gone for it (ala its MegaSports subsidiary in Australia).

Because its Nevada gaming license is at stake, AWI has always been extremely careful to stave off American bettors.

That's why I was shocked to learn that an agent from the Nevada State Gaming Control Board was able log on to the Internet from Nevada and wager at the MegaSports website. (In case you're not up-to-date, see "The Ugly Details Behind the AWI 'Sting'" and "Trouble for AWI.")

At first, I was disappointed in AWI. Companies with policies against accepting bets from certain jurisdictions have slipped before--World Interactive Gaming Corp. and, allegedly, Starnet, for example--but AWI, with its Nevada license surely wouldn't allow this to happen, would they?

So what happened? Did they get too greedy? Were they sloppily cutting corners and just not being preventative enough?

Neither, actually. What happened is absolutely disgusting, but it involved little--if any--wrongdoing on the part of AWI. Amazingly, even the complaint filed by the Board--their side of the story, mind you--shows that AWI clearly goes to great lengths to block wagers from U.S. bettors. Still, the Board was determined to infiltrate AWI's control system, and went as far as setting up an account with a Canadian ISP and forging a birth certificate to do so.

The end result was AWI doing the right thing: It rescinded the agent's account and refunded his original deposit. Somehow, the Board is satisfied that AWI screwed up and now it wants the Nevada Gaming Commission to take disciplinary action.

Obviously, there was intent from the beginning to nail AWI and, in the big picture, attack online gambling in general. But, what was the motive? Was it to stomp AWI and thus hoard gaming revenues for the state of Nevada (a scenario casino gaming advocates in California are no doubt all too familiar with)? Or was it simply to make the Australian regulatory approach toward online gambling look bad?

Of course, one could suppose that the purpose of the sting operation and subsequent complaint was to abide by Nevada Gaming Commission Regulation 5.011, which says: "The board and the commission deem any activity on the part of any licensee, his agents or employees, that is inimical to the public health, safety, morals, good order and general welfare of the people of the State of Nevada, or that would reflect or tend to reflect discredit upon the State of Nevada or the gaming industry, to be an unsuitable method of operation and shall be grounds for disciplinary action by the board and the commission in accordance with the Nevada Gaming Control Act and the regulations of the board and the commission."

But as long as we're citing run-on-sentence-ridden Nevada regulations, let's take a look at NRS 465.092, the rule that AWI is accused of violating throughout the Board's complaint. NRS 465.092 provides as follows:

    1. Except as otherwise, provided in NRS 465.094, a person, alone or with others, shall not knowingly, within or outside of this state,
      (a) Accept or receive, directly or indirectly, through any medium of communication a wager from another person who is physically present within this state; or
      (b) Allow a lessee, agent or employee to accept or receive, directly or indirectly, through any medium of communication a wager from another person who is physically present within this state.
    2. If a person engages in conduct in violation of subsection 1 and the person is outside of this state at the time of the offense:
      (a) The offense shall be deemed to commence outside of this state; (b) The offense shall be deemed to be consummated within this state; and
      (c) The person may be prosecuted within this state pursuant to the provisions of NRS 171.015.

The key word in the above passage is 'knowingly'. If you read the complaint, you'll realize that MegaSports did not knowingly accept wagers from an American bettor. They did, however, knowingly freeze his account and then give him the boot when they had reason to believe he was in the U.S.

Regardless of what the Board was trying to do, what it's done is prove, yet again, that the general attitude toward online gambling in the U.S. is narrow minded and ridiculous.

Because of bone-headed policy, the U.S. is missing out on gaming revenues in an effort to protect Americans from the inevitable. Thanks to the bullish enforcement of bone-headed policy, companies with vision, such as American Wagering, have to pay the price.

Mark Balestra

Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.