It’s happening at a snail’s pace, but online poker is slowly becoming a reality in Nevada. Multiple companies have already been approved as operators or service providers. Meanwhile, various other Vegas heavy hitters like the Wynn Resorts, Hard Rock Hotel, and Treasure Island are in the queue for consideration from the Nevada Gaming Control Board.
Like it or not, online poker will go live in Nevada in the very near future. It can’t happen soon enough: Vegas is currently in starvation mode, with revenues down since the “Great Recession” started in 2008. The balance sheets of domestic casino operators are slowly recovering, but only after significant layoffs and cutbacks. Operators with International presences are faring much better: Wynn Resorts, The Venetian, and others have collected big paychecks courtesy of Macau, where Chinese officials only recently allowed foreign companies to setup shop.
Here is a list of Approved Online Poker License holders in Nevada as of January 30th, 2013. Note that the Nevada Gaming Control board distinguishes each licensee based on the particular business they operate: service provider, operator, affiliate, technology provider, auditing, etc.
IGT – Approved for service provider license on June 21, 2012.
Bally Technologies – Approved for a service provider license on June 21, 2012.
Shuffle Master – Approved for a service provider license on July 26, 2012.
Neteffect Networks – Approved for a service provider license on July 26, 2012 (hosting services for online poker websites)
South Point Poker – Approved for an operator license on August 23, 2012.
Monarch Casino and Resort – Approved for an operator license on August 23, 2012.
Global Cash Access Holdings – Approved as a service provider on August 23, 2012.
WMS Industries – Approved for a service provider license on September 20, 2012.
American Casino & Entertainment Properties – Approved for an operator license on September 20, 2012.
PokerTrip – Approved for an affiliate marketing license on September 20, 2012.
Boyd Gaming – Approved for an operator license on October 18, 2012.
GNLV – Approved for an operator license on October 18, 2012.
Fertitta Interactive – Approved for an operator license and software provider on October 18, 2012.
MGM Resorts – Approved for an operator license on November 15, 2012.
Z4 – Approved for a software provider and manufacturer on November 15, 2012.
CAMS – Approved as a service provider on November 15, 2012.
Caesars Entertainment – Approved for an operator license on December 20, 2012.
Golden Gaming – Approved for an operator license on January 24, 2013.
Lottomatica – Approved as a service provider on January 24, 2013.
…and there will no doubt be MANY more to come.
The first affiliate marketing license was approved for PokerTrip Enterprises. When this was announced, affiliates in the online gambling community had mixed reactions. On one hand, it shows the Nevada Gaming Board is open to affiliate marketing for online gambling, but on the other, one must jump through significant legal, corporate, and background investigations in order to qualify. The old days of joining a gaming affiliate program and posting its banners on your website within 20 minutes are gone. If online gambling becomes legal in the USA, affiliates will likely have to follow PokerTrip Enterprises’ lead and get licensed first.
While licensing affiliates does make sense from a regulatory standpoint, it does erect substantial financial barriers to entering the legalized online poker market. In various interviews at online gaming industry websites, PokerTrips Enterprises indicated substantial time, patience, and legal information was required to get their license. Translation: you’re going to need $$$ to get all the paperwork together and $$$ to hire attorneys to advocate on your behalf. Those wishing to promote offshore online gaming sites, however, need only have an address, bank account, and a productive website.
Finally, it’s important to clarify how PokerTrip Enterprises – and other subsequently approved affiliates – will get compensated. Although the exact payment plays aren’t clear yet, it appears Nevada Online Poker operators would pay affiliates modeled after a CPA (Cost Per Acquisition) program. TwinSpiresAffiliates.com, the affiliate program for Churchill Downs that allows webmasters to market legal online horse betting around the USA, pays a measly $60 per player if you send 10 or less depositors, which is the case for most smaller affiliates. If you can send more than 10 players per month, you’ll get a $10 raise up to 25 new accounts, or additional $20 ($80 per player) above and beyond 26. Remember, in order to get a higher CPA, you have to send a double-digit amount of players EACH month. For example, you might send 30 depositors in May for the Kentucky derby, earning you $80 per acquisition; however a slow June with only 8 players drops your CPA back to $60.
In the eventual “legal” online gambling world, affiliate revenue share programs will be a thing of the past. Low-ball CPAs from stingy corporate casino owners will be the unfortunate new reality.
Keep tabs on who gets licensed in Nevada and how. 888.com has organized a holding company to get licensed in Nevada, even though it wasn’t so long ago that 888.com stopped accepting USA players to avoid USA Department of Justice legal action. It goes to show that if you have the money to create the necessary legal corporate entities in the United States, you’re good to go.
Otherwise, affiliates and poker operators on a budget will have two choices: 1) Continue to promote offshore properties, or 2) Find a new way to make money.