Gaming Commission OKs relationship between Caesars, online gaming provider

The Nevada Gaming Commission on Thursday approved the first ever business relationship between a state-licensed gaming company and a foreign-based Internet gaming operator.

Commissioners said they didn't think this would be the last time Nevada gaming agents will investigate a deal such as the arrangement between Caesars Entertainment Corp. and 888 Holdings.

"My guess is that we're going to see a lot more of these," said Commissioner Tony Alamo. "We're not going to rubber stamp all these deals, but (888 Holdings) answered all my questions. This is something we're going to have to get our arms around."

Gaming Commissioner Randolph Townsend said it was ironic the regulatory panel was looking at the Caesars-888 business venture on the same day the Assembly Judiciary Committee heard testimony on a bill that would allow Nevada to legalize Internet poker.

"I believe at some point there will be pressure on the (Gaming Control) Board and this commission to authorize Internet gaming in Nevada," Townsend said. "This is just the first of many relationships that will come before us."

Caesars Interactive Entertainment CEO Mitch Garber, who fostered the business relationship with 888, agreed with the gaming commissioners.

"You can count on being very busy," Garber said. "Nevada licensees will want to partner with online gaming companies."

Gaming commissioners unanimously found that the arrangement between the companies was suitable under Nevada's Foreign Gaming Act following a hearing that lasted more than two hours. The Gaming Control Board approved the deal on March 9.

888, which is based in Gibraltar, and its DragonFish subsidiary provide Caesars with the equipment, software and security measures to operate online gaming websites in the United Kingdom.

The Internet domains, which include a casino site themed after Caesars Palace, and a World Series of Poker site, don't accept wagers from Americans. Caesars recently announced plans to launch Internet gaming sites in France and Italy.

In a presentation to the gaming commission, Caesars and 888 officials outlined steps the companies undertook to foster the business relationship, including an exhaustive internal investigation of the Internet company by the casino operator's regulatory and legal compliance department.

888 accepted wagers from American gamblers before the October 2006 passage of the Unlawful Internet Gaming Enforcement Act, which made it a crime for banks and other financial institutions to process transactions used in online gaming. 888 immediately stopped taking wagers from Americans when the act was approved by Congress, reducing company revenues by 57 percent.

888 CEO Gigi Levy said the company takes numerous steps to ensure that underage gamblers are not allowed access to the website while the company has more than 200 different protocols and checks in place to ensure that problem gamblers are taken off the site.

Levy said the average player wagers about $100 a month on 888's Internet gambling sites.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.