On Wednesday, the Nevada Gaming Control Board approved the groundwork of a partnership between Caesars Entertainment and gambling giant 888 Holdings that could potentially change the legal landscape of online poker in the state of Nevada. According to a report from the Las Vegas Sun, Caesars formed a relationship with two subsidiaries of 888 Holdings, Fordart Ltd. and Cassava Enterprises Ltd., which the company believes will help expand its World Series of Poker brand into the U.K. market.
The Nevada Gaming Commission will meet for a final vote on March 24th and, if approved, would create the first partnership between a Nevada licensee and a foreign internet gaming provider.
“It was a historic moment,” said Mitch Garber, CEO of Caesars Interactive Entertainment. “It confirms that internet gaming is a reality. It should allow us to look more and more at a Federally regulated environment in the United States.”
Gibraltar-based 888 would provide Caesars with the equipment, software, and security measures to operate online gaming websites in the United Kingdom. Caesars also has plans to invade other overseas markets, such as France and Italy, where online gaming is regulated.
The partnership wouldn’t have any effect on American consumers at this time, but the move signals that the laws could eventually be changed in the States. On Thursday, an online poker bill was introduced in Nevada.
“It’s a business-to-business agreement that would allow Caesars to offer games in the U.K.,” Board member A.G. Burnett said prior to the vote. “UIGEA is vague at best and was done in haste and its passage forced [888] to abandon the U.S. market to its detriment.”
Garber told gaming regulators the arrangement with 888 was struck after an exhaustive internal investigation of the company by the casino operator’s regulatory and legal compliance department. He said it was more cost-effective for 888 to build the Caesars and World Series of Poker websites than having the casino operator create the software.
The Gaming Control Board did display concerns about 888’s prior involvement in online gambling in the United States. However, Attorney Michael Horowitz, one of several lawyers representing 888, noted that the company made the decision to pull out of the U.S. market before the UIGEA was signed into law. “The words and actions of 888 were clear,” Horowitz said in a statement. “The company has a commitment to doing what is right and doing what is legal despite the damage to revenue generation.”
888 CEO Gigi Levy pressed that fact even further during a testimony from Israel on Wednesday, saying that the company’s records were open to any gaming commission worldwide or government regulatory body. In terms of site security, Levy added, “We operate sophisticated anti-fraud and anti-money laundering systems.”
888 was formed in 1997 in Antigua and relocated to Gibraltar in 2002. Levy said the business has been in good standing with gaming regulators in Gibraltar for eight years, noting that the company’s compliance team had developed software to ensure the identity, location, and age of an online user.
Should online poker regulation ultimately become a reality in the U.S., it is believed that companies like 888 would have the first shot at the U.S. market. Those who continued to offer online gambling to U.S. customers, such as PokerStars and Full Tilt Poker, could be left out of the initial licensing process.
“To use a baseball analogy, I’d say we’re in about the third inning on working through the issues of internet gambling,” Board Chairman Mark Lipparelli said just before Wednesday’s vote was taken. “It’s an evolving discussion and an evolving set of standards.”
