Winning hand: Paving the way for online poker

As mandated by Assembly Bill 258, which dictates that Internet poker regulations be established by Jan. 31, the Nevada Gaming Commission on Thursday adopted rules that allow companies to apply for licenses to operate poker websites in the state.

Approved unanimously, the new regulations are intended to put Nevada in a position to capitalize on the lucrative online poker business should Congress overturn the ban and allow online poker to be played across state lines.

(At present, the federal Unlawful Internet Gambling Enforcement Act of 2006 prohibits companies from accepting payments related to online wagering, though it allows several exceptions.)

“We estimate the U.S. online poker market at $5 billion in revenue, relative to the current $24 billion global Internet gaming market and (the) $33 billion commercial casino market in the U.S.,” Union Gaming Group analyst Bill Lerner wrote in a research report. “In our opinion, the commercialization of online poker is a 2013 event.”

For now, Nevada’s regulations would allow the state’s casino companies to operate Internet poker sites limited to players within the state’s borders — some of which could be up and running by the end of 2012.

Licensed firms will have to prove that their technology can limit play to state residents of legal age.

These are big steps in the right direction. So was the revelation Friday that the Justice Department no longer believes the federal Wire Act of 1961 applies to online poker.

Yes, there are potential risks for any such commerce — including concerns over cash reserves to pay winnings, as well as potential money laundering, fraud and other criminal activities. But Nevada regulators are experienced in these matters, and the rules OK’d last week include requirements that operators establish procedures to deal with each of them.

Online gambling is going to occur — is occurring right now. The question is whether players are going to have the protection offered by recognizable, “branded” sites operating under reasonable onshore regulation, and whether Nevada is going to be in a position to share in the windfall, both direct and indirect, based on its hard-won history and reputation.

The key is to be ready when the time comes.