Mark Lipparelli Sees Several New iGaming Bills in Next Legislative Cycle

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Mark Lipparelli, a former Chairman of the Nevada Gaming Control Board, recently accepted a position with CAMS, a company that provides payment processing services and “Know Your Customer” verification to the iGaming industry.

Chris Grove interviewed Lipparelli via email following the announcement of his position at CAMS.

Lipparelli shared his views on how regulated sites can win customers from their unregulated counterparts, momentum for compacts and likely legislative hotspots in 2014.

Mark Lipparelli

Grove: You recently said that “the future of US-based internet gambling lies with innovators like CAMS.” Can you expand on that?

Lipparelli: As a sixteen year veteran of the gaming technology field – and one of the architects of the Nevada regulatory system – I provide a deeper understanding of the nascent internet gambling industry here in the US.

We now have the technological means to effectively regulate the industry and CAMS is at the forefront of that technology. Our coming together seems quite natural.

Grove: Can you speak to some of the fundamental challenges facing the development of interstate compacts?

Lipparelli: We can all agree that a world with fifty state-specific standards would be a nightmare.

As for obstacles involving other states, I can only provide some advice: keep it simple. Far-reaching compacts simply will not work and ambitious rigid technologies will weigh down an operation that can otherwise thrive on simplicity. There is no reason to re-invent the wheel in this case. Any challenge faced by a state can be easily addressed by existing technologies or regulatory framework.

Uniform standards would save money and allow states and their licensed operators to move expeditiously.

Grove: Is it unrealistic to expect a functioning interstate compact to be operational by the end of 2014?

Lipparelli: I believe that there will be some kind of intermarket pact in the not-too-distant future – especially from states that do not have an existing regulatory infrastructure.

Grove: Which states (excluding NV, NJ and DE) do you expect to make the most material progress toward online gambling regulation in 2014?

Lipparelli: State legislatures are very hard to predict but I do think there is a high likelihood that the next legislative cycle will result in several new bills leading to new online gaming expansion – at least 3 or 4 states. For those with a negative outlook, I point to the fact that few would have predicted casino gaming in states like Pennsylvania, Maryland, and Massachusetts yet here we are. Illegal operators are thriving in the current system and that is not acceptable.

Grove: A number of unregulated online poker sites continue to operate in the U.S., even in markets like Nevada where regulated options exist. What’s the key to regulated sites winning customers from these unregulated operators?

Lipparelli: The illegal sites still operate with a “wild west” mentality – no regulation, no licensure and not accountability toward their players. It is (and has always been) a huge risk for a player to entrust them with their money, banking information and digital ID. Law enforcement are constantly monitoring these bad actors and – as we’ve seen on multiple occasions – they have the means to prosecute.

Once a state provides a legal and safe channel by which to gamble online, most level-headed players will make the transition. Running an effective marketing campaign that touts player safety and security should attract most of the holdouts.

Grove: Can you talk a bit about the thinking behind launching with poker only in Nevada?

Lipparelli: During the development of our regulations, there was a sense that something might develop at the federal level. All of the bills contemplated limiting online gaming to poker only. We were respectful of that mindset. Nevada does have the statutory authority in place to expand into other games now but that will be driven by industry demand. I expect we will see these discussions begin in the near future.

Grove: You said that your position with CAMS “presents the opportunity to further shape the nascent internet gambling industry within the US.” What sort of shaping do you have in mind?

Lipparelli: My experience in managing technology based products over sixteen years as well as a more than passing knowledge of regulatory requirements should be helpful. Online gaming is just getting started in the US and CAMS is looking to me for guidance on how to they can support a reasonable framework for regulation. There will be certainly differences from brick and mortar gaming applications but the integrity focus is at least as important.

- Chris is the publisher of Grove also serves as a consultant to various stakeholders in the regulated market for online gambling in the United States.
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