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Copyright © 2016. All Rights Reserved. Poker History. Editor: Erik Smith.

NEVADA DEMANDS SEGREGATED FUNDS

The Nevada operators are supposed to hold the player’s funds not just in segregated accounts, but in separate trusts. Also the operators are not allowed to have any ownership of these funds. Along with many other stringent audit procedures, Nevada has set up a new level in the industry for the proper and responsible regulation of poker that goes way beyond the strict governance of brick-and-mortar casinos. Due to this the residents and visitors of Nevada will have the safest places to play online poker.

The regulations specify that they players funds will be held in reserve accounts and the ownership of the funds will not belong to the operators. The regulations stipulate that “the operator has no interest in or title to the reserve or income accruing on the reserve.” As a result of this cause any operators that attempts to use the players funds for operating the costs will be acting criminally and be breach regulations also.

The recent history of companies getting into financial difficulty from Full Tilt and AB/UP to Purple Lounge and 5050 poker have exposed the vulnerability of the player’s money. Despite some regulations like LGA purportedly requires the proper segregation of the players deposits.

There are two problems that can arise: The first problem is that operators will run short of cash and the desire to borrow the player deposits for operating the costs becomes irresistible. Secondly, when companies shut their doors the players have to get into a long line of creditors that are looking to get paid.

The largest failing that has been reported up to date is Full Tilt Poker in which hundreds and millions of players have lost their deposits for their operational costs and payouts to the shareholders and directors. It has been said that the players will be paid thanks to PokerStars.

Pokerfuse has advocated in the past that only separate trust funds will ensure that players come first. There have been regulations that have been directed upon by Nevada Gaming Commission and require measures by all licenses: The separate trust funds will have control over player deposits; and if a company goes bankrupt then the player’s funds will not be considered part of the company’s assets and will be returned the full amount.

PokerStars has been a long-time proponent of holding player funds in trust funds and its regulator in the Isle of Man has quite a reputation among its licenses. PokerStars has a strict policy to self-impose more stringent regulations. In Nevada the players will not have to rely on the good will of the poker rooms. The Nevada Gaming Commission has set out an exemplary level of protection for the players. Nevada has set the bar high to a new level of protection and one that should be standard across the global industry.

Source:Pokerfuse