The ongoing saga over Internet poker's legality took several juicy turns Thursday as a major casino company teamed up with the world's top Internet poker site, Nevada lawmakers mulled the issue and state gambling regulators for the first time blessed another casino operator doing business with a Gibraltar wagering company.
After a two-hour hearing, the Nevada Gaming Commission approved a relationship between Caesars Entertainment Corp. and 888 Holdings PLC, which runs online casinos in the United Kingdom and is publicly traded on the London stock exchange.
About three hours later, Wynn Resorts Ltd. announced it had formed a strategic alliance with PokerStars to try to legalize and run an Internet poker business in the United States. Thursday morning, PokerStars representatives pushed lawmakers in Carson City to adopt a bill that would legalize online poker statewide.
"The lack of regulation of Internet gaming within the U.S. must change," said Steve Wynn, the billionaire chief executive of Wynn Resorts, which owns real-life casino-resorts in Las Vegas and Macau.
"We must recognize that this activity is occurring and that law enforcement does not have the tools to stop it," he said. "It is time that the thousands of jobs created by this business and the potentially significant tax dollars come home to the U.S."
Gigi Levy, chief executive of 888, said worldwide online gambling revenue is expected to be $24.2 billion in 2011, and reach $26.1 billion in 2012. He said sports wagering accounts for 41 percent of that, while casino games make up 23 percent and poker 19 percent.
The $4.6 billion online poker industry is 60 percent controlled by the top two operators, Levy said. Those operators are PokerStars and Full Tilt Poker.
In voicing opinions over the possible Nevada law and Caesars' tie with 888, gambling regulators spoke of future partnerships between traditional casinos and online companies and expressed that _ at some point _ legalized Internet gambling might be inevitable.
"Whether this bill passes or not, there's going to be pressure on this board and this commission to authorize Internet gaming," Commissioner Randolph Townsend told a Caesars executive just before joining others in unanimous approval of the business tie.
"This is the first of perhaps many relationships that will be developed over time," Townsend said.
Wynn Resorts said it and PokerStars planned to chase federal legislation, then run a jointly named website for Americans.
Mark Scheinberg, chairman and founder of PokerStars, said the alliance with Wynn is a critical step toward a closely regulated Internet gambling business in the United States.
PokerStars continued offering online gambling and sponsoring players in the United States despite federal legislation in 2006 that made the activity technically illegal. PokerStars' roster of sponsored professionals has some of the game's most famous faces, including Daniel Negreanu, Chris Moneymaker and Vanessa Rousso.
If any legislation passes, a crucial point will be how the law chooses to treat sites like PokerStars. A last-minute federal effort by U.S. Sen. Harry Reid that fell short in December would have punished sites that offered gambling to Americans after 2006 by making it tougher for them to get a license under new regulations. That legislation was backed by the casino industry's top lobbying group, the American Gaming Association.
Since then, PokerStars has been pushing for the Nevada bill and other states, including New Jersey, California, and Hawaii have begun considering the issue as they try to raise tax revenue and create jobs. The AGA has not commented on the Nevada bill.
Caesars executives have said the company, which owns more than 50 casinos in several countries including Caesars Palace and the annual World Series of Poker, is against state-only legislation and would prefer a federal solution.
Caesars' new deal with 888 allows the companies to work together to run online gambling sites in the United Kingdom, and free-money sites in other jurisdictions using Caesars brands.
Caesars has been considering online gambling for years, and is positioning itself to be ready in case lawmakers eventually make online gambling legal in the United States.
"The UK is not the end of our plan or our vision," said Mitch Garber, chief executive of Caesars subsidiary Caesars Interactive Entertainment.
Caesars and 888 executives and lawyers told the commission they have been careful in assessing their relationship and the legalities of Internet gambling. 888 stopped offering online wagers in the United States after the law changed in 2006.
Garber declined to comment on the specifics of the Nevada bill, but said hearings in New Jersey, California and Nevada, as well on the federal level, show the movement is picking up momentum.
"As a company, you clearly know that we have been lobbying and are in favor of legalized and taxable online gaming," Garber said. "We see this all as a very positive development for online gaming and we intend to be at the forefront of all these developments."
The privately held Caesars lost $196.7 million during the fourth quarter ending Dec. 31, on revenue of $2.12 billion.