Nevada regulators propose Internet gambling rules

LAS VEGAS - Nevada regulators have drafted new rules to govern Internet gambling should federal lawmakers explicitly legalize the popular activity.

The proposed rules come after state lawmakers passed a bill last session requiring the Nevada Gaming Commission to have plans in place by January to license and regulate online wagers.

The Silver State is hoping to position itself to pounce in case Congress finds a way to legalize and regulate Internet poker. Lawmakers including U.S. Senate Majority Leader Harry Reid have urged the issue be settled on a federal level.

Mark Lipparelli, chairman of the Nevada Gaming Control Board, said the technology supporting Internet poker isn't perfect, but has improved enough to allow the state to properly regulate companies that want to offer the game online.

"We can't predict what may happen with any national legislation and we have attempted to frame these regulations in a manner that will provide appropriate flexibility," Lipparelli said. "This will be a rigorous process and these regulations will, no doubt, undergo a good deal of revision."

The regulations drafted propose to tax operators for online poker revenue at the same rate the state taxes gambling regulators in casinos statewide. It also limits Internet wagers to poker, where players gamble against one another instead of against the house, like in blackjack, craps or roulette.

Software companies that offer Internet poker would have to go through the same scrutiny as casino officials, even if they partner with casinos, according to the proposed regulations.

The rules would also require operators to keep exact histories of every hand played on file for five years, including the players involved in the games, the wagering and other details.

Players and potential operators want new laws more than ever since the U.S. Justice Department in April began cracking down on poker websites that offered gambling to Americans. An indictment unsealed April 15 in New York targeted executives of three top poker companies - PokerStars, Full Tilt Poker and Absolute Poker - that were operating sites available to Americans.

Nevada initially tried to legalize Internet poker, but the bill was watered down and now defers to the federal government. Federal law does not explicitly prohibit states from authorizing Internet poker within their borders, but states have asked the federal government to clarify whether the federal ban would trump any state laws.

Other states have considered legislation to make Internet poker legal, but only the District of Columbia has passed it and made plans to have a government-run system.

Nevada, which generates more gambling revenue than any other state, is widely regarded as a trendsetting state when it comes to casino regulation.

Nevada's proposals will go through public workshops and must be approved by the full commission.