07/13/2005 11:00PM

Coming soon: Account wagering


For those who live in the 17 states where account wagering is legal, it's not a matter of if you'll be able to make bets through Nevada race books, but when.

On Wednesday afternoon at the Grant Sawyer Building in downtown Las Vegas, the Nevada State Gaming Control Board heard discussions about Regulation 26C, which would make it legal to bet races from out of state through Nevada casinos, as long as customers are also in a state in which is it legal. According to Anthony Cabot, a well-known local gaming attorney who was representing the Nevada Pari-Mutuel Association, those states are currently California, Idaho, Connecticut, Kentucky, Louisiana, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, Virginia, Washington, and Wyoming.

Cabot was the point man for the presentation that the NPA - the group that represents the state's race books - made before the board, and he outlined the history of legislation that has led to Nevada losing handle in recent years while other states implemented account wagering. He said the watershed moment was a 2000 federal ruling that opened the flood gates. Before then, Cabot said, only four states had account wagering. A Bear Stearns report estimated that account wagering comprised only 4 percent of the national betting handle in 2000 but that it had grown to 13 percent by 2004. It is expected to grow to 20 percent, or $3 billion, by the end of 2005.

Cabot said that Nevada was losing business to nearby states in recent years. Oregon, which is home to several account-wagering hubs, has gone from nothing in wagering handle in 2000 to handling more than Nevada last year.

Last year, Nevada handled a combined $516 million from its 86 race books, down from the $619 million that the state handled in 1999, before the federal ruling that made account wagering widespread. Cabot pointed out that Nevada's nearest competitor, California, handled $430 million in account wagering alone in 2004.

"As an industry, we're confident we have the brand names and the talent to compete in the marketplace," Cabot said. "It puts us back in the game."

Cabot commended the Gaming Control Board, and specifically member Bobby Siller, for its work in the past year and a half in getting the regulation written.

"When we started, it was sort of like herding cats to get everything together and narrowed down to what we're very happy with," Cabot said.

The new regulation would allow people in states where account wagering is legal to either come to Nevada and sign up at a racebook or - and this is something Cabot said he was happy the board agreed to - to send in an application and fund their account with a credit or debit card.

Bets would then be taken over the phone, just like with other account-wagering companies. Cabot had a representative from an Oregon account-wagering hub give a presentation on call centers and how they handle incoming bets and customer service. Gaming Control Board chairman Dennis Neilander stressed that licensees (read: race book operators) won't have to use an outside company if they want to do it in-house. Cabot said, though, that the smaller operators might find it more cost-effective to let an outside company run their account-wagering service.

"We want to make this as open to everyone as we can," Cabot said.

Wednesday's meeting was expected to rubber-stamp Regulation 26C, but Neilander opened the meeting by saying that the board wasn't going to vote on the regulation on Wednesday, as expected, because of some new information that the board needed to review.

Neilander said that if nothing else comes up, he hopes to have a board vote on the regulation at next month's board meeting in Reno, and then they would go for final approval by the Gaming Commission on Aug. 25.

Account wagering would then be legal, though Neilander said the casino companies would then have to decide what networks and software they would use, and then would have to submit those to the board for testing and approval.

"We've worked with these technologies a lot lately, so most of the testings and approvals should go smoothly," he said.

Neilander wouldn't give a specific timeframe, but he agreed that account wagering is unlikely to be in place by the Breeders' Cup, although perhaps by the first quarter of 2006.