Commentary by Guy W. Farmer: Online poker, a risky proposition

The recent federal indictment of three Internet gambling websites should cause the Nevada Legislature to think twice before legalizing online poker, a risky proposition at best and a criminal enterprise at worst.

Although proposed legislation in Carson would limit permission for online poker to Nevada gaming licensees, specifically excluding offshore entities, the difficulty of policing Internet gambling is virtually impossible. As Gov. Brian Sandoval, a former Gaming Commission chairman, knows all too well, gaming control goes hand-in-hand with legal gambling and there's simply no way the state can police online poker to the high standards expected of our gaming licensees.

The federal indictment I mentioned earlier charged three Internet poker companies - PokerStars, Full Tilt Poker and Absolute Poker - with bank fraud, illegal gambling and money laundering. Federal prosecutors in Manhattan immediately issued restraining orders against 75 bank accounts in 14 countries, thereby interrupting the illegal flow of billions of U.S. dollars.

The indictment accuses the defendants of concocting "an elaborate criminal fraud scheme ... to assure the continued flow of billions in illegal gambling profits." And Las Vegas political columnist Jon Ralston asserted that PokerStars "believed (that) for a relatively small investment ... it could grease the way for a new law that would fundamentally undermine the system of gaming regulation in Nevada and circumvent a federal ban on Internet gambling." Nice.

That's why I think the Gaming Commission made a mistake in March when it voted to allow Caesar's Entertainment, which operates Caesar's Palace and Harrah's casinos, to do business with a Gibraltar company that offers online wagering. And even worse, Wynn Resorts entered into an agreement with PokerStars to try to legalize and run an Internet poker business in the U.S.

It's no coincidence that most of these Internet gambling outfits are based in remote places like Gibraltar, the Isle of Man and small Caribbean islands, where law enforcement is minimal, and it's worrisome to know that PokerStars last year provided free international trips to three Las Vegas Democrats. Assemblymen Kelvin Atkinson and William Horne went to London "to see company products," and Senate Majority Leader Steven Horsford attended a gaming conference in the Bahamas. The Legislature should investigate and the three globe-trotting lawmakers should recuse themselves on any online gambling vote. Meanwhile, all of this dubious activity should serve as a warning to our state gaming authorities.

Incredibly, the proposed online gambling bill would prohibit the Gaming Commission from denying licenses to offshore poker sites. As a former Gaming Control Board staffer, I oppose any legislative attempt to dilute the regulatory powers of our respected gaming control agencies.

With luck, the federal indictment against the Internet poker companies will make online gambling less likely in Nevada, as well it should. Therefore, I urge the Legislature to just say no to Internet gambling. We shouldn't lower our strict gaming control standards in order to accommodate a few big casinos that want to run online poker games.

• Guy W. Farmer, of Carson City, was a state gaming control official in the 1960s.