The first in a four-part series about Nevada Gaming wrangling with a new era of poker regulation as Harrah’s and PokerStars fight …
The inaugural NAPT-Venetian was by most accounts a smashing success. PokerStars announced the tournament in January, and less than six weeks later — at a time when big-money players usually would be heading to California for the WPT-Commerce — 872 entrants made it to the Venetian for a televised $5k main event in Las Vegas.
(The February event, and others from the fledgling North American Poker Tour, are currently airing on ESPN-2 and TSN, the leading sports television channel in Canada.)
But it wasn’t the field size, TV cameras, or $4.1 million prize pool that made the NAPT-Venetian special … it was that the Las Vegas tournament was “presented by PokerStars”. Dot net.
Perhaps surprisingly, because we see so much PokerStars on TV … this was the first time since the UIGEA that a licensed Nevada casino partnered with PokerStars (or any site like it) for a major open tournament.
Its success didn’t go unnoticed. And that may prove to be the problem for PokerStars and the North American Poker Tour, as the inaugural NAPT-Venetian will probably — almost certainly — be the last.
Hosting the event was a bold move by PokerStars, particularly considering how much scrutiny the world’s largest online poker site would come under as the June 1 UIGEA enforcement deadline nears … and structures for fully legal, regulated American online poker begin to take shape.
Few are speaking publicly about heated communications between Nevada casinos, the state Gaming Control Board, attorneys, and the Department of Justice and other federal agencies. But chatter from Las Vegas to London, and decisions in Carson City, reveal a story with multibillion-dollar implications that could’ve changed the face of poker as we know it — with PokerStars setting up shop on American soil to directly challenge the supremacy of the WSOP.
PokerStars has not acknowledged that they’ve actually been booted out of Nevada by anyone, nor that they were preparing to challenge the World Series head-on in Las Vegas with another NAPT.
There were even discussions about a possible series of NAPT events scheduled to start in just a couple weeks. However, investigations sparked by NAPT-Venetian have intensified, and now threaten the viability of the expansion tour itself.
Even with an announcement about the NAPT’s next stop expected within days, decisions in Nevada will likely change PokerStars’ future in America … while providing a glimpse of what’s really at stake (and how ferocious the battles are becoming) as corporate US casinos take on off-shore online poker rooms.
With the bona fide arrival of the North American Poker Tour in February, the US got a taste of tournaments by the masterminds behind the EPT, duly credited with transforming the European pokerscape.
Getting approval from the Nevada Gaming Control Board wasn’t as difficult as some might have thought. All they had to do — they being the Venetian, the licensed entity under the Board’s authority — was ask.
“There’s been a passive acceptance of dot-net advertising with Nevada casinos,” says Randall Sayre, a member of the Gaming Control Board who has become the state’s primary regulatory authority on online poker issues, particularly as they relate to live events and the difference between dot-coms and dot-nets.
The WSOP and parent company Harrah’s compliance team first noted this distinction in 2006, before the UIGEA, but by 2007 decided they needed to go further and end all formal relationships with any foreign online poker companies still serving American customers. Though one company’s internal decisions by no means dictate state-authored policy, other Nevada casinos hosting live events followed suit.
Sayre explains why dot-nets used to be fine:
“Past indications from the Justice Department [and other federal agencies] are that if dot-nets were a company or a site that merely put entertainment play out there, not gambling play, and did not advertise their gambling site, and did not have direct access to a gambling site in what they called a 3-click rule, then no enforcement on the federal level would be taken.”
Nevada authorities thus determined they too could allow such relationships, Sayre says, “that are limited to the advertising, where you’ve got guys with dot-nets on their hats or dot-nets on the felts.”
With that in mind, the UK-based NAPT (presented by PokerStars.net) brought to Vegas not just big buy-in, real-money action, but also the economic stimulus that comes with attracting a couple thousand people to a specific casino … while encouraging further activity by promoting said venue on ESPN … and don’t forget the related media jobs and production-crew wages!
The Gaming Control Board can indeed consider such factors when one of its licensees wants to associate with foreign interests, as they did upon sending a letter giving the Venetian express permission to host the NAPT.
But approval for the Venetian to work with PokerStars apparently didn’t sit well with others who have been sitting on the sidelines in the online gaming marketplace for nearly four years.
Requests to Gaming Control have intensified since early March — making in-depth study of the relationships between brick-and-mortar casinos with off-shore online gambling sites a priority. “We’re talking about poker specifically,” Board member Randall Sayre says. “That’s what’s being debated. A new policy is developing as we speak.”
Shortly after the announcement of the NAPT, Sayre’s office began receiving both informal and formal requests from specific casino companies, industry representatives, as well as federal and state authorities to reconsider that position … and at a minimum, clarify the state’s stance.
He says these requests have intensified since early March — making in-depth study of the relationships between licensed brick-and-mortar casinos with off-shore online gambling sites a top priority for the Board. “To be clear, We’re talking about poker specifically,” Sayre says. “That’s what’s being debated. A new policy is developing as we speak.”
One key component they are looking at, of course, is the connection between dot-coms and dot-nets, where Sayre believes co-mingling of funds may put licensees in a compromising position. “There’s a renewed emphasis on commercial relationships with companies doing business in America that are not in compliance with what DOJ has determined is an illegal activity. [The casinos] have to decide whether or not they want to accept the risk of diciplanary action because of an unsuitable association.”
Sayre won’t give specifics about who’s been complaining the loudest, nor confirm identities on any privileged correspondence between the Board, its licensees, their attorneys, and/or state and federal authorities. But it’s not hard to deduce who might have had the most pressing interest in what the Venetian may or may not have had taking shape long-term with the NAPT. Any party hosting live WSOP or WPT events — without the competitive advantage of seating online qualifiers — come to mind.
NAPT-Venetian was never intended to be just an experimental one-off undertaking. The tour headed next across the country to Mohegan Sun in Connecticut, where the thumbs-up comes from the Mohegan Gaming Authority … and from there, the NAPT looked poised to secure casino hosts in several different states, one gaming jurisdiction after another, allowing them to replicate the EPT model across North America. Sure, there would be obstacles along the way, but Global Poker Tours, Ltd., the Isle of Man-based provider of PokerStars’ live tournaments worldwide, had faced a far more complex legal landscape throughout Europe and Asia to successfully pull off events in more than a dozen countries.
Meanwhile, PokerStars has not acknowledged that they’ve actually been booted out of Nevada tournament operations by anyone, nor that they were preparing to challenge the World Series head-on in Las Vegas with another NAPT. Venetian Poker room management are not commenting on the matter either, other than to say they are looking forward to an exciting summer Deep Stacks … with poker-room spillover extending to 119 tables.
As regulatory paperwork continues to shuffle with increasing veracity, and the belief that a true alternative to the World Series was still a possibility, it’s probably no coincidence that PokerStars.com wasn’t offering any online WSOP satellites until less than a month prior to the 2010 start date, much later than in prior years.
And there are of course no satellites whatsoever for the WSOP on PokerStars.net.
Coming next …
Part 2: Dot Net vs. Dot Com vs. Dot Gov