Thursday, March 24, 2011 | 2:49 p.m.
Nevada gaming regulators entered uncharted territory in cyberspace today.
The Nevada Gaming Commission approved the suitability of a relationship between Caesars Entertainment with subsidiaries of an Israel-based Internet gaming company operating in the United Kingdom’s overseas territory of Gibraltar.
The vote was unanimous with Commissioner Joe Brown abstaining because of a potential conflict of interest with his law firm.
Approval of the licensing is considered by many to be a major step for online gaming because it enabled industry regulators to formally acknowledge the ability of the government to oversee Internet casino play.
Commission Chairman Peter Bernhard said he was satisfied that the relationship between the two companies did not violate any state policies or regulations and that it was a suitable association.
By approving the licensing, regulators didn’t change anything for players in the United States. However, the approval does acknowledge that regulators have no problem with Caesars associating with a major Internet gaming company.
The five-member board approved Caesars’ relationship with Cassava Enterprises (Gibraltar) Ltd. and Fordart Ltd., subsidiaries of Internet gaming giant 888 Holdings PLC, which offers online casino games, poker, bingo, sports wagering and social gaming applications in the United Kingdom, France and Italy.
The approval marked the second time a Nevada licensee was approved to have a relationship with an operator under the state’s foreign gaming statutes. In 2007, regulators approved what was then MGM Mirage to conduct business with Pansy Ho and her company in Macau.
Representatives of Caesars didn’t offer many details about what they plan to do with the new relationship with the 888 subsidiaries. However, Caesars owns the World Series of Poker brand and hopes to exploit it in European outlets. If Internet poker is legalized in the United States, Caesars figures to have hardware and software with a leading company in place.
Commissioners asked several questions of 888 officials to get assurances on protections against underage gambling, problem gambling and money laundering. Executives said they have a number of safeguards in place to assure that an Internet player is of legal age. Any accounts with suspicious activity could be shut down quickly by the company.
In other business, the commission approved the licensing of new companies and subsidiaries that will take ownership and operation of the bankrupt Riviera hotel-casino and an unusual licensing of a foreign manufacturer and distributor of roulette wheels.
The commission unanimously approved the licensing of financier Barry Sternlicht, the founder of Starwood Hotels & Resorts Worldwide, to acquire control of Riviera Holdings Corp.
Sternlicht purchased the 2,075-room property out of Chapter 11 bankruptcy protection.
Andy Choy, CEO of the Riviera’s new holding company, told commissioners that the company plans to inject $20 million into upgrading the Riviera’s public areas and focus on customer service in gaming to attract players.
“We’re not going to have a lot of high-end amenities and restaurants, we just want to offer a superior gaming environment,” Choy said.
Choy said the operators plan to capitalize on the Riviera’s status as a classic Las Vegas icon. He noted that with the closure of the Sahara in May, the Riviera will be one of the last “old Las Vegas” properties operating.
The company plans no new room capacity and will rehire the property’s staff. A marketing campaign using social media is planned.
“The property is in better shape than I anticipated,” said new general manager Bobby Ray Harris. “All of the rooms are in pretty good shape.”
The commission also approved a manufacturing and distribution license for Kent, England-based Cammegh Ltd., a roulette wheel manufacturer, to operate in Nevada.
Commissioners allowed several waivers to a typical manufacturers’ license because a full investigation of the company would have made the cost of marketing new roulette wheels in the state prohibitive.
The conditions approved on the license enable regulators to call the company in for more questions as it gets established in the state.
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