Online poker: The perks and pitfalls of being first in the country

Ron Sylvester

A screen shot of the new Ultimate Poker game being launched on Facebook Friday, June 22, 2012, by Las Vegas company Fertitta Interactive as seen demonstrated on Tuesday, June 19, 2012.

Beyond VEGAS INC

The race to roll out the first legal, real-money poker website in the United States is over — and it ended in Nevada.

Station Casinos on Tuesday launched a 30-day trial of UltimatePoker.com, which allows in-state gamblers to play online poker from computers or mobile devices.

“It’s a new day in online gaming,” Ultimate Poker Chairman and Founder Tom Breitling said. “Nevada is first, and Nevada should be proud.”

What exactly does it mean to be first?

For both the state and Station, it's a resounding victory — with a burden.

“It’s a major accomplishment,” said Bo Bernhard, director of UNLV’s International Gaming Institute. “It’s also a daunting responsibility.”

The world will be watching to see whether Station can draw gamblers to its new site and whether Nevada can successfully set the standard for online poker operations in the United States.

Never fully legal, Internet poker had been banned in the United State since 2011 when federal prosecutors indicted operators of some of the world’s largest online gaming websites in a major crackdown known as “Black Friday.” The Department of Justice seized the domain names of the largest offshore sites that catered to U.S. customers, forcing players to move into brick-and-mortar casinos or risk breaking the law.

Click to enlarge photo

Surrounded by Nevada legislators, Gov. Brian Sandoval signs an online poker bill into law, Thursday, Feb. 21, 2013. The law will allow Nevada to move ahead with online poker in the absence of federal action.

Since then, the federal government softened its stance on Internet betting, and three states — Nevada, New Jersey and Delaware — have approved online wagering.

Last month, Nevada gaming officials approved Station’s online poker technology, enabling the company to launch Ultimate Poker.

Offerings include Texas hold ’em, single table cash games and multi-table tournaments. Buy-ins range from a penny to $100.

In order to play, gamblers deposit money into an online account and log onto the site, which lists open tables and the number of players sitting at each. Players can cash in winnings at any of Station’s 16 casinos.

The appearance and mechanics of Ultimate Poker resembles most free poker sites, including PokerStars.com, but there’s one major difference: Liquidity, a fancy term for player traffic.

Since Nevada law requires online gamblers to bet from within the state only, the pool of potential players is limited. Nevada has a population of only 2.8 million.

“The old system’s liquidity was massive,” Bernhard said of the global poker sites that let players gamble from any place. “Now you’ve got an island.”

To help boost traffic, Ultimate Poker will allow tourists who plan to visit Nevada to create an account before they arrive. Once they're in state, they can legally play poker online — a phenomenon industry officials have dubbed "poker tourism." Nevada attracts more than 47 million visitors a year.

Station also plans to offer guests rewards for playing Ultimate Poker, much like player points they receive in casinos. The points can be traded for free rooms or food.

Company and state officials hope to serve as an example to other states that are considering tackling Internet gaming.

“What Nevada is showing is proof of concept,” said Tony Cabot, an Internet gaming expert and lawyer for Ultimate Poker. “Once you can show a concept works, it takes away a bit of the uncertainty around it.”

Officials say the gaming system is equipped with law enforcement tools to prevent identity theft and underage gambling, some of the major concerns surrounding Internet gambling.

If all goes well, a good showing from Ultimate Poker could lead to interstate compacts that would expand online gaming. States could team up to create larger money pools that would attract more players.

“Everyone is going to be watching,” Bernhard said.

Eight casino companies, including MGM Resorts International and Caesars Entertainment, have received online gaming licenses since the state legislature adopted regulations in 2011. Station was the first to get approval.

South Point Poker had hoped to launch to the first real-money Internet poker site last year and started hiring employees to run it. But the company had to push back plans to launch as representatives work with state regulators to get final approvals.

Once Ultimate Poker’s 30-day trial ends, the gaming control board will review findings at a public hearing.

•••

These are the companies that have been licensed by the state for online gaming:

OPERATIONS

• Fertitta Interactive (Ultimate Gaming and Ultimate Poker), owned by Station Casinos

• Golden Nugget Poker, partnering with Bally Technologies

• Caesars Interactive (World Series of Poker), partnering with 888 Holdings

• Treasure Island, partnering with 888 Holdings

• South Point, affiliated with South Point Poker

• MGM Resorts International, partnering with bWin. Party Digital Entertainment, Gibraltar

• American Casinos and Entertainment Properties Interactive, affiliated with the Stratosphere, Arizona Charlie's

• Sartini Synergy Online, online arm of Golden Gaming

• Monarch Interactive, affiliated with Atlantis in Reno and Riviera Black Hawk, Black Hawk, Colo.

SYSTEMS PROVIDERS

• Bally Technologies (Bally Gaming Inc.)

• Global Cash Access Inc.

• International Game Technologies

• SHFL Entertainment Inc. (formerly Shuffle Master)

• South Point Poker

• WMS Gaming

• 888 Holdings

SERVICE PROVIDERS

• CAMS LLC (geolocation, patron identification, payment processing)

• Certegy Check Services Inc. (geolocation, patron identification, payment processing)

• Link Technologies (information technology)

• Neteffect Networks (information technology)

• Pokertrip Enterprises Inc. (marketing affiliate)

• Xerox Business Services (information technology)

• Xyverify Corp. (geolocation)

PENDING

• Aristocrat Technologies, to be considered for licensing by the state Gaming Control Board and Nevada Gaming Commission this month.

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