The Nevada Gaming Control Board late Friday issued additional policy guidance to Nevada licensees about offering online gaming outside of the state and highlighted countries that are prohibited.
The five-page memo issued by Board Chair Mike Dreitzer highlighted the growth of wagering activities found in online casinos, among other forms of online gaming, all which rely on operating platforms, systems, or software and/or other content designed for online play.
As a result of this expansion, the Board has determined that additional policy guidance is necessary for all licensees, plus applicants that currently operate in or seek to pursue opportunities in online gaming in jurisdictions outside of Nevada.
“The overall goal of this guidance is to reduce potential adverse consequences for licensees and applicants under the Board’s foreign-gaming requirements and in particular (Nevada state law),” Dreitzer said.
In recent years, those involved in online gaming have faced increasing complexity in determining which jurisdictions are legal and illegal or prohibited, Dreitzer said.
This situation is further complicated by other factors, such as whether the online gaming products are offered from within or from outside the jurisdiction and the variety of igaming approaches available.
As of the date of the guidance, Dreitzer said the examples of countries “presumptively prohibited” include Australia, China, Cuba, India, Indonesia, Iran, Russia, Saudi Arabia, Syria, and Thailand. He added that the list isn’t exhaustive and it’s the responsibility of licensees to conduct their own due diligence to confirm the legality of online gaming in any jurisdiction.
“Moreover, this list may change at any time through further guidance from the Board as circumstances warrant,” Dreitzer said.
No reason was provided in the memo as to what prompted its issuance.
Whether online gaming products are provided from within or outside a jurisdiction, types of commercialization approaches include business-to-consumer, where a licensee operates online gaming for players; business-to-business, where licensees supply online gaming products to third parties that offer these online gaming products to players in certain jurisdictions; and games and content aggregators that distribute online gaming products across multiple operators or platforms, Dreitzer said.
“The Board recognizes that without definitive written guidance, there have been different assessments by the gaming industry, gaming regulators, and subject matter experts, leading to inconsistent definitions and interpretations of the legality of offering online gaming products directly or indirectly under different commercialization approaches in different jurisdictions,” Dreitzer said.
To comply with the Nevada Gaming Control Act and the Board’s foreign-gaming requirements under state law, Dreitzer said licensees are expected to follow this guidance, as well as completing full and proper due diligence, when evaluating the appropriateness and suitability of offering online gaming to or in a jurisdiction, regardless of the commercialization approaches or the location from which the online gaming products are provided.
Due diligence may include consulting with the licensee’s internal risk and compliance departments or committee, following established policies, procedures and compliance plans, obtaining legal analysis, and any other appropriate methods, Dretizer said.
In all cases, due diligence may also include consulting with the Board’s Investigations Division at any stage the licensee may deem appropriate, Dreitzer said.
“The absence of any enforcement action against any gaming company in a specific jurisdiction does not in itself mean that online gaming products may be legally offered in that jurisdiction,” Dreitzer said. “Rather than relying solely on enforcement activity, licensees should conduct due diligence to independently assess the legality of offering online gaming products in each jurisdiction based on applicable laws, prior to engaging in any commercial activity in that jurisdiction (whether from within or outside the jurisdiction) under any commercialization approach,” Dreitzer said.
For B2B or aggregator approaches, it is understood that a licensee’s due diligence can rely on their contractual partner’s due diligence for each jurisdiction, assuming conditions are met, Dreitzer said.
There is a presumption that a jurisdiction is prohibited if it has laws that expressly prohibit online gaming offered either from within or outside the jurisdiction or has taken intra-jurisdictional or extra-jurisdictional enforcement actions against players or companies offering online gaming.
“For purposes of this guidance, enforcement actions may include but are not limited to criminal or civil proceedings, blocking of IP addresses or internet domains, deep packet inspection, Layer-7 filtering, cease and desist orders, banking actions, and payment blocking,” Dretizer said.
As the legal status of each jurisdiction can be dynamic, licensees are expected, at least every two years, to conduct thorough due diligence of all jurisdictions.
