Handheld Gambling Device Receives Nevada Approval - Friday 5th of May 2006
by Howard Stutz
Las Vegas Gaming Wire
LAS VEGAS Nevada gaming regulators said Wednesday it was appropriate that Cantor G&W receive preliminary approval as the state's first licensee to manufacture and distribute hand-held gambling devices.
Cantor G&W, an affiliate of New York-based financial services firm Cantor Fitzgerald, spent two years pushing hand-held gaming legislation through the Nevada Legislature. The company also offered its comments while the Gaming Control Board wrote the regulations governing mobile gaming. The regulations were approved in March.
The company is still adding opinions and ideas as the technical requirements for mobile gaming devices are being developed by state regulators, a process that could take until year's end.
"This is a company that has been at the forefront of this issue," Gaming Control Board Chairman Dennis Neilander said. "We don't really know yet what the market will be like (for these products), but this company has shown its leadership."
Mobile gaming allows Nevada casinos to offer their customers use of a wireless, hand-held gaming device, similar in size to a BlackBerry. Casino patrons could use the devices to place wagers from areas outside the traditional casino. For example, gamblers could wager on hands of blackjack or spins of a roulette wheel from poolside or the buffet line.
Cantor G&W hopes to be the first equipment provider to have a hand-held gaming device in a Nevada casino.
"Once the technical requirements are ready, we'll have a product ready for approval," said Joe Asher, managing director of Cantor G&W.
The Nevada Gaming Commission will act on the control board's unanimous recommendation May 18.
Last year, Cantor G&W lobbied the Nevada Legislature to approve Assembly Bill 471 and Guinn signed the measure into law. Since then, some of the gaming industry's largest equipment makers, including International Game Technology and Shuffle Master, have expressed interest in bringing hand-held gaming devices to the market.
Cantor G&W is using technology that it has applied to government bond trading to its potential hand-held gaming devices. Cantor Fitzgerald Chairman and Chief Executive Officer Howard Lutnick told Gaming Control Board members the company has invested more than $400 million in technology development and was the first company to offer customers interactive electronic bond trading.
Lutnick said Cantor Fitzgerald bond traders conduct transactions of more than $250 billion daily and $50 trillion annually.
The company has supplied similar hand-held gaming devices for use in the United Kingdom.
"We've been thinking about this for a very long time," Lutnick said after the control board hearing. "We have experience in security with the number of bond transaction we do on a daily basis. We will bring a product to the marketplace that is unique and innovative."
Control board members' only criticism was that Cantor G&W had not done a market study on hand-held gaming's potential. Asher said it would have been tough to explain mobile gaming to prospective customers in the early stages.
"What is the potential size of the market?" Asher said. "No one knows. The 2005 win in Nevada was $11 million. I don't know if mobile gaming will eventually represent 3 percent or 5 percent or 10 percent or more of that market. If mobile gaming can add just 1 percent to the market, that's $110 million."
Cantor Fitzgerald, widely known as the New York company that lost the largest number of employees in the Sept. 11, 2001, terrorist attacks on the World Trade Center, has rebuilt itself into a worldwide financial services company with more than 2,800 employees.
"No history of our company is complete without discussing the tragic events of Sept. 11," Lutnick said.
The company, housed on the 101st to 105th floors of the World Trade Center's Tower One, lost 658 employees in the attack, including Lutnick's brother, Gary.
Since then, Cantor Fitzgerald has distributed $166 million, or 25 percent of the firm's profits to the families of the victims. Also, the company pays for health insurance for those families and it continues to raise money for the families through the Cantor Fitzgerald Relief Fund.
Control board members commended the company for its recovery efforts.
"I look forward to this company participating in other aspects of Nevada gaming," Neilander said.
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