Nevada was the first state to pass online poker regulation and also the first to see regulated real-money poker sites go live, but Chairman of the Nevada Gaming Control Board A.G. Burnett dismisses the idea that regulation is a competition.
Marco Valerio recently talked to Chairman Burnett about the supposed online gambling race amongst the states, his thoughts on interstate compacts, and more.
Valerio: I’m curious about something you said earlier today, talking about Nevada poker. It’s been a few months. You said you’re pleased, so maybe we can begin by talking about what are…in view of what’s happened in the last few months in Nevada, what is happening now, what are maybe some of the things you’re looking forward to in the next few months?
I’m not going to ask you a year or two, but in the short-term, what do you think is coming up in Nevada, regulatory speaking and from the business perspective?
Burnett: I’m looking forward to watching the operators as they come online, and as they stay online, in how they operate separately and individually. Right now, for example, we have two separate and distinct types of operators. We have Ultimate Poker and we have 888’s product with Caesars World Series of Poker, and to me, they’re two very good examples of what online operators can offer poker players.
I’m interested to see if there’s competition between the two. I’m interested to see if the two can bring some revenues to their home base properties that they’re affiliated with. I’m interested in seeing what types of marketing they do, and I’m also interested in seeing new operators come online as we move forward, and how they affect the market or how they intermingle with the other two.
It’s like the Las Vegas Strip. You’ve got different themed properties, and I think Nevada’s starting to look a little bit like that with the online operators, too, which, in my opinion, is good. It’s a good thing.
Valerio: Let’s talk about from the regulatory perspective now. You were talking a little bit about New Jersey. You made an interesting point about how people view it as a competition. You don’t think it’s that. Could you maybe reiterate that point?
Burnett: Yeah. I know that there’s a notion that there is some type of a competition, but from Nevada’s standpoint, as I was saying to you earlier, we don’t view it that way.
We simply view ourselves as doing what we’ve always done, and as I explained in the panel, that is taking what our operators want, and deciding whether it’s something that’s appropriate and something that we can regulate, and then in fact regulating it, and licensing either new operators or our current licensees to go forward with that new part of the business.
It’s just an example of what Nevada’s always done over the last 50 years or so. We encounter problems every day, but we encounter new ideas constantly, and some of those ideas see the light of day, and some don’t, but to say it’s a competition, I think, is over-dramatic, perhaps. I’m not sure exactly where that came from or why it is, but there’s no need for it, because in reality the states are all in this together, and I think states are going to do their own thing, if you will, without federal intervention.
Valerio: What do you make of this upcoming compact challenge, and what role do you think that Nevada can play in the formation of compacts, and what role can, obviously, the board play?
Burnett: To answer the latter part of your question first, Nevada has a head start, plain and simple, and I don’t say that in any competitive fashion or not. That’s just a fact. We’ve been looking at this starting in 2001, and we’ve been serious about regulating it for the last three to four years. As far as compacts go, believe me, we’ve looked at the idea of compacts going back as far as a year.
Maybe I should, Marco, clarify that we’re moving on from the term “compact,” because when you talk compact in the American legal community, it brings connotations of some sort of sharing agreement between states for some kind of natural resource, like water, for example, or mineral rights, but what we’re really talking about here would be an interstate agreement regarding player liquidity.
To just call it a liquidity agreement, for example, or a mutual cooperative agreement, I think is better. We already have created drafts of what those could look like. We did that probably six months to eight months ago, so we’ve got that position where we think that those types of agreements are going to be the way that liquidity moves forward.
You mentioned poker, and I think it’s probably most important with poker, because you do need that live action at the table feel. I’m not saying that from a Nevada perspective, but just from a worldwide gaming perspective. We all know liquidity is what makes it count, and in order for that liquidity to be present, states are going to have to mutually agree as to how they’re going to do certain things.
I think that Nevada wants to enter agreements, but we want to make sure that we enter into agreements with states that have taken a similar approach to ours as far as the things they care about, the things they want to protect and keep safe, things like player protection, problem gambling, setting appropriate limits, making sure the technology’s been vetted, making sure that the regulators are fluent in understanding technology.
Because, as you know better than I do, you’ve been doing this longer than I have, it’s not something you just jump into. You need to really spend a lot of time learning.
Valerio: I should have your job.
Burnett: Yeah, you should. I’ll trade.
Valerio: Recommend me if ever you feel like retiring.
Burnett: Those things all take time, so I guess that’s my thought.
Valerio: Just a few more questions then. Thanks so much for your time, but people are just talking about, “Oh, compacts.”
I understand that we still have to wait for another state to go live, which might be days away, but when do you think we might begin to see what I just referred to as the first really practical, visible attempt at a compact? We don’t need to get private, but are you talking to some people? Are you making plans with some states?
Burnett: I think that it’s something that the states are thinking about, and there’s only three — Nevada, New Jersey, and Delaware. I’ve laid our position as we, I think are in a position of waiting for our sister states perhaps to come to us and see if they’re interested in doing something along these lines. We feel that it can be done quite easily with both states.
Probably what would happen, if I was to prognosticate, if that’s the right word, Delaware needs to get up and running and prove out their platforms, New Jersey needs to get up and running and prove out their platforms, and until those two events occur, and occur successfully, I don’t know that much will happen, but I don’t have any time, I don’t have any days.
Valerio: We’re still in the theoretical study of it as opposed to the practical, if that makes sense.
Burnett: Very much.
Valerio: Final question – As a state regulator, how do you currently assess the federal climate?
Burnett: Once a bill is promulgated, I get that bill and I read it right away. Other than that, we’ve got some eyes and ears on the Hill, but I probably know about as much as you do about what’s going on, and I think it’s safe to say that things will continue to be floated on the Hill.
But I think that, as time goes on, there’s a continuing degree of skepticism as to whether anything can be passed, especially in light of some of the disagreements that have occurred in Washington, and in light of the fact that if another bill were to be floated, it would be, what, the seventh or eighth? We get it, we look at it, and, like we always done, we analyze it and decide how it would affect us and what we would need to do, if anything.
Valerio: Do you recall ever being more alarmed than usual that any bill in recent memory might succeed and potentially seriously alter your daytime routine?
Burnett: Yeah. I think the last one…
Valerio: Which one, Reid-Kyl?
Burnett: Actually, Reid-Kyl, I think, was a very important one for us, and we took a lot of time in looking at that. It seemed to me that it had a chance. I give a lot of credit to our Nevada delegation, our congressmen and senators from Nevada, especially Senator Reid.
He’s done a lot of work, and obviously he’s one of the most powerful and influential people in Washington, DC. It will be interesting to see what happens next there, but I think the states are just going to continue along, and unless and until something happens in DC, that’s how it’s going to continue to look.
Valerio: Mr. Chairman, I really appreciate it.
Burnett: Yeah. Good to meet you, Marco.