A Closer Look at ‘New Regulation 5A’, Nevada Gaming Commission

When the proposed New Regulation 5A was put forth by the Gaming Control Board in 2011, it identified the key aspects of online poker from a governing body perspective. Whatever the rules and regs that had been followed in the past, by the Alderney Gambling Control Commission (British Channel Islands), or the Kahnawake Gaming Commission (Mohawk Territory in Canada), the Nevada version will surely and quickly become the gold standard. In this post we’d like to take a look at some notable parts of the regulations.

First off, it is made clear that for any interactive gaming system to operate legally in the state it must first be approved by the gaming commission. The minimum internal controls are referenced in parts 5A.060 and 5A.070 with regard to security protocols, most importantly the requirement that a list of persons with access to any part of the system must be maintained with the Gaming Control Board. Player verification is also covered in this section and more fully in 5A.110 (including age and location verification).

To address concerns over the possibility of money laundering using online poker accounts, 5A.120 prohibits money being transferred into an account from one financial institution and then subsequently withdrawn out to another institution. Nor can players transfer funds, via their online accounts, to any other players.

Probably the most important section of the document to poker players, in the wake of the Full Tilt and Absolute Poker scandals, is 5A.125 which sets forth the reserve requirements for player accounts. By law, the operator of a poker site must maintain a reserve in “cash, cash equivalents, an irrevocable letter of credit, a bond, or a combination” to protect players’ funds. The reserve has to equal the sum of all combined player funds held in interactive gaming accounts. This demonstrates the importance of player/consumer protection to Nevada’s gaming commissioners. The section goes on, in great detail, to provide specifics on how the funds are to be maintained, and if necessary drawn upon at the behest of the chairman.

Reserve requirements need to be calculated by each licensed online poker site on a daily basis. If the value of the reserve is not sufficient to cover the requirement in any 24 hour period, the site has to: 1) notify the chairman in writing; and 2) indicate the immediate actions that will be taken to correct the deficiency. All records regarding the reserve and player funds have to be examined by a certified public accountant on a monthly basis, and the findings have to be reported to the board. This type of required financial backing and oversight is what players who entrust their money to sites deserve.

These are just a few highlights of the main topics covered by Reg 5A. For those interested in learning more, the full text of the regulations can be found here.