Online gambling has been a Pandora ’s Box for poker players in the United States. But that all changed overnight in 2011 on a day dubbed Black Friday, when sites were forced to stop offering real money to players. Online gambling activities have since moved off shore, operators of online gambling hubs that were predominant in the United States like FullTilt were shut down, and online poker players fled to Canada or Europe to continue their careers. But the black out on Internet gambling may end as early as next year, contingent on the success of the first ever online real-money poker site that’s planning to launch on U.S. soil.
3G Studios, the company partly responsible for the development of the game Rock Band, and Eldorado Interactive, LLC, owner of a chain of resorts and casinos in Nevada, have entered into a ground-breaking partnership that could change the course of online gambling in the United States for millions of online poker players this coming spring.
And there is plenty of red tape they’ll have to cut through; this industry is heavily monitored and regulated. For starters, Nevada restricts online gaming licenses to brick and mortar casinos. The surface, this might appear to be politically charged, but in reality, the Nevada gaming board is reducing its risk. “Casinos already have a history of successfully detecting fraud, putting security controls in place, reporting to the gaming board, and paying their taxes,” founder and CEO of 3G, James Kosta, explains.
Second, the law will only allow online gambling sites to focus on online poker and its many derivations. 3G and Eldorado’s real-money gambling poker site will offer 12 games initially, but Kosta told us that he hopes to eventually offer 15 and 20 additional poker games pending the gaming board’s approval.
But that’s just the tip of the iceberg: To meet the standards of the Nevada gambling board, which oversees the regulations for gambling, an online gambling operator has to meet its strict requirements.
For example, an online gambling operator must collect geolocation, age, and identity verification data to make sure that its gamblers are of age and located within the state of Nevada. They must be equipped to detect money laundering and collusion, which Kosta says was “the most difficult of all.” For example, if hackers were to DDOS the online poker site, 3G has to handle the fallout in respect to the players that may lose or gain money at the time of the attack. They’ll even have to enable a feature to blacklist addictive or problem gamblers, which according to Kosta is a little known fact about the gambling industry.
Because 3G and Eldorado will be the first to launch a legal online gambling site on U.S. soil, all eyes will be on Nevada and the partnership. “It’s going to be a learning experience for the gaming commission,” says Kosta. With criticisms and pressure from legislatures looking for reasons to forever ban online gambling in the United States, the gaming board is on edge and limiting online gaming to a fairly select group of people “who can respond very quickly to threats.” Kosta adds. “In one way it’s a very political process, getting your gaming license.”
On the other hand it’s an expensive and laborious endeavor that will run 3G several hundreds of thousands of dollars for thorough independent testing, and between $750,000 and $1 million for the gaming license alone. “It’s meant to be an exclusive club for a while. Everybody is paying attention to whether or not Nevada can successfully launch these games and regulate them,” says Kosta.
3G and Eldorado aren’t looking to become the kings of poker. Instead the partners are looking to create a cross-platform online gambling service with social features baked-in to target the casual arcade gamer. You can call it a social poker site, but Kosta noticeably treads carefully here and tells me that “it’s misplaced to be pushing social gaming in the real money environment.” There’s a delicate balance between social and gambling that 3G and the gambling industry is trying to figure out right now with the million dollar question being, “Does adding social hooks increase participation?” For instance if you’ve hit a real-money jackpot would you necessarily want to publish that fact on Facebook or Twitter? Or, if you lost a significant amount, would you want that fact broadcast to your social network?
Before 3G and Eldorado’s real-money gambling site is launched to mobile devices and desktops, it will release a series of play-money casino games like its recently announced SlotALot Casino. But 3G’s heart isn’t just in casino games, and Kosta eventually wants to turn his venture into a platform for betting on first-person-shooter and strategy games for the PlayStation and Xbox systems. But for now, 3G will work on getting the hearts and minds in the market on board with online gambling.