nevada ok's mobile devices

patswin · August 2005

Mobile Gambling Devices May Get to Casinos August 2, 2005, 8:37 PM EDT CARSON CITY, Nev. -- It won't be long before gamblers are shooting dice while queued up waiting to see their favorite comedian. Or playing poker and roulette under a poolside umbrella. Even a trip to the buffet will no longer keep casino patrons from playing slots. A law signed last month by Gov. Kenny Guinn made Nevada the first U.S. state to approve the use of wireless, handheld gambling devices at its hotel-casinos. It's a small step forward for casino companies aching to offer Internet-based gambling who are watching offshore competitors reap huge profits from a business that federal law bars them from entering. "I think every major casino company wants to get into online gaming but without access to the U.S. market it becomes a costly venture," said Deutsche Bank gambling analyst Marc Falcone The gadgets, Falcone said, are the "first step in a long process." The restrictions, for one, are plenty: Under the law, the devices can be used only in public areas of casinos that have 100 or more slot machines and that offer at least one other gambling game. The devices would be barred from hotel rooms and other private areas. And they won't be available overnight. Dennis Neilander, the State Gaming Control Board chairman, says it will be several months to a year before regulators set rules for using the handhelds. One force behind the bill is Cantor Fitzgerald LP, the New York-based financial services company that suffered mightily in the 2001 attacks and is seeking to retreat for the gambling industry the technology that powers its interactive bond-trading. Another backer was Louisiana-based Diamond I Inc., which has developed its own device. "The tech-savvy generation, the late baby boomers and the next generation all grew up with a Nintendo in their hands. Everyone has a PDA," said David Loflin, president of Diamond I Inc. "This is an extension of that." The world's No. 1 slot machine maker, Reno-based International Game Technology, also pushed for legalizing the wireless gambling. "Nevada is the first state to have a bill to allow this. Once Nevada does it, you'll see the New Jerseys and the Mississippis do the same thing," Loflin predicted. Cantor Fitzgerald's prototype device isn't much bigger than a checkbook, can slip easily into a coat pocket, and is already used in Britain for sports betting. Falcone doesn't expect the devices to account for any serious revenue or be a significant driver of growth. And besides, state regulators won't approve them until they're persuaded that they can be effectively monitored. Cantor Fitzgerald says that won't be a problem. Its wireless device uses a form of encryption to ensure security, said Joe Asher, managing director of Cantor G&W. Asher would not disclose details about the encryption method, and said a biometric system that reads a permitted user's fingerprint could also be used if regulators prefer. The wireless devices would be linked to a server that could verify the gambler is the person who checked out one of the devices at a casino. Asher says the devices could be set to stop working in non-authorized areas, and players could establish limits in advance by depositing money in an account. High losses in a short period could cause the device to shut down -- keeping problem gamblers from going too far in the hole. "Security is a big deal and we are very familiar with it because we operate in that world today," Asher said. While Cantor Fitzgerald may see lucre in wireless gambling, the lone state legislator to vote against the bill sees nothing but headaches and lost income for people like her. Sen. Maggie Carlton, D-Las Vegas, a waitress at the coffee shop at Treasure Island resort in Las Vegas, says it's bad enough that the state has allowed Keno to be played away from the casino floor. "There needs to be places where there aren't two and three gaming devices at your disposal," she said. "It's hard enough to get somebody's order when they're trying to fill out a Keno slip. All I need to find out from them is how they like their eggs and what kind of toast they want." And what about enforcing rules for who can use the devices and where, asks Carlton. "What's going to be my responsibility?" she wonders. "Am I going to be obligated to turn someone in if I see them hand it to their kid?"