South Point Becomes First Licensed Intrastate Online Poker Room in U.S.

It had been known as inevitable for about a month, but it finally became official Thursday: South Point Poker LLC became the first company licensed to offer intrastate online poker in the United States. Once South Point launches, its poker room will be able to accept players from within the state of Nevada’s boundaries, provided they are at least 21-years of age.

The Nevada Gaming Control Board (GCB) recommended South Point for approval earlier this month, so it was up to the Nevada Gaming Commission’s (NGC) three-member panel to formally grant South Point the license on August 23rd. It did so in unanimous fashion. The company expects to launch sometime in October.

In July, eGaming Review magazine (EGR) interviewed South Point chief executive Michael Gaughan about the likely license approval. While he doesn’t expect South Point Poker to become an unstoppable behemoth, he is excited to have the first legal U.S. online poker site. “I may not be the biggest or the best,” he told EGR, “but hopefully I’ll have a head start by two or three months.”

Unlike other online poker license applicants, South Point has developed its own software client, rather than partnering with a developer. In that same July interview, Gaughan said that the software was in its second wave of testing. An independent lab is still finishing tests, but there has been no indication that South Point’s client will not pass. In June, the GCB registered Gaming Laboratories International and BMM International to test interactive gaming equipment for the state, so the testing lab is likely one of those two.

South Point actually has an online poker room up and running already, but it is completely different from the one that is coming. The current South Point Poker is a free-to-play room on the ZEN Entertainment Network. The rooms on the network are totally free – no monthly fee is required – and offer cash and prizes to winners of their tournaments. Gaughan’s first venture into online poker has not been as successful as he would have liked. “It (the software) was complicated and hard to download,” he told EGR. “[The poor results were] partly down to the provider and partly because I lost interest in it when it didn’t grow as fast as I thought it would.”

The software that is currently undergoing testing is a completely new product and will be unrelated to what is currently being used on South Point’s ZEN site.

While Gaughan and the South Point team are excited about being the first in the Nevada intrastate online poker arena, being first isn’t without its drawbacks. South Point is the guinea pig and will arguably be scrutinized harder than any of its successors. “We want to make sure it’s done correctly because what you do might have an impact on what others do later,” Commission Chairman Peter Bernhard said at the licensing hearing.

Lawrence Vaughan, South Point’s Chief Operating Officer is confident that his product will be up to the task. Of particular concern is keeping those who are underage and/or outside of Nevada’s borders off the site. “We have to make sure you are who you say you are,” Vaughan said. “We’ll know if the person playing is the person who is supposed to be playing.”

There will also be safeguards on the site to prevent cheating and money laundering and to help problem gamblers.

While South Point was the headliner Thursday, Reno-based Monarch Interactive also received the green light from the Nevada NGC. Monarch is a step or two behind South Point, though, as it does not have its own software, instead planning to partner with an established developer. Also licensed was Global Cash Access Inc., which will be an online payment provider. The company already supplies ATMs and provides credit services to casinos and will now partner with South Point as the online poker room’s payment processor.