Spring 2014 issue of Horizons

number and verifying a patron’s registration information matches the patron’s information from the social security number. In addition, New Jersey and Delaware require a patron’s email address and telephone number, whereas Nevada does not.

As of January 2014, three states have legalized various forms of online gambling — Delaware, New Jersey and Nevada. Regulators and operators in each of these states must implement a system of controls that provides a platform that gives users reasonable assurance that their personal information is safe and the casino game play is fair. The security of players’ information involves ensuring personally identifiable information is protected to prevent activities such as identity theft and theft of patron funds. Maintaining integrity of the game ensures the game is fair and no one patron or operator holds an unfair advantage over another patron.

Player Identification All three states require operators to

reasonably assure that a patron signing up is over 21, not self excluded or otherwise prohibited from gambling by using the patron’s address, mobile phone number and email address for verification. In the virtual space, patrons do not sign up in person, challenging operators to verify ages in a different manner. Gaming operators must prove to the state that they can accomplish this using the information provided by potential patrons. One notable difference between the three states is that Nevada allows a patron to gamble before being an “authorized player,” whereas New Jersey and Delaware require authorization before a player can wager real money. In Nevada, operators have 30 days to determine if the patron-provided information is accurate. During this 30-day window, the patron is allowed to play. However, if the patron’s identity cannot be confirmed, all winnings must be returned to the casino. Regardless of the state, to gamble online, a patron must physically be in that state or in a state that has entered into an online gaming compact. (Note: On February 25, 2014, Delaware and Nevada entered into an online poker compact that allows patrons to wager across state lines in either Delaware or Nevada.)

Regulators will be challenged with:

∙ Balancing rules-based regulations with principles-based regulations

∙ Designing regulations that promote a profitable business model by limiting the cost of compliance

∙ Keeping up with the ever-changing online security environment

The following provides a summary of how the first three states to legalize online gaming have taken similar, but also individually unique, approaches to regulation.

Player Account Set Up Player account set up must have certain controls in place to stay in compliance with federal law. All three states have taken a similar approach to mandate that each user has a unique login. Each user must provide their legal name, date of birth, address and social security number.

If a patron is not within the state or a compacted state, then the player is

gambling illegally across state lines. All three states have similar requirements of operators

The most notable requirement across the three states is requiring a valid social security

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