Online Poker a Potential Boost for Nevada Data Centers

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Switch was the first Nevada data center approved to host online gambling sites, which recently became legal in Nevada. Online gaming may represent a $400 million business for Nevada. (Photo: Switch)

Several U.S. states are looking to legitimize and legalize online gambling, with Nevada leading the pack. The launch of online poker services represent an opportunity for data centers that can meet the regulatory standards for housing gaming infrastructure. Last May colocation provider Switch announced that its SuperNAP data center has been approved as  registered hosting center for online gaming, and now ViaWest says it has gained approved for its new facility at Lone Mountain, Nevada.

Nevada is breaking ground for online gaming nationally, with new laws allowing online poker passed in February of this year. The services are restricted to players at least 21 years old and physically located in Nevada. Station Gaming (Ultimate Poker) and Caesar’s (World Series of Poker) are the first companies to launch legal online poker operations in Nevada.

New Jersey and Delaware also have similar online gaming initiatives, but there haven’t been any announcements from data centers in those states.

Online gambling is projected to be a $7.4 billion business in the U.S. by 2017, according to researcher H2 Gaming Capital, which says Nevada will represent about $400 million of that total. After years of debate. the states adopting online gaming are tightly regulating early entries, and hosting in approved facilities means that players gain some assurance and providers like Switch and ViaWest stand to benefit.

The Nevada Online gaming commission conducted rigorous inspections of both Switch and ViaWest facilities and determined they met requirements necessary for mission critical gaming data. Gaining the new designation can assure licensed gaming entities of the highest availability and security for their outsourced critical data and disaster recovery.

The online poker scene imploded in 2011 when the biggest sites, Full Tilt Poker, Poker Stars, and Absolute Poker were charged with fraud, money laundering, and violating gambling laws. While most gambling is hosted offshore, a trusted in-state data center located within state goes a long way in legitimizing what has been a fringe, albeit huge industry.

Lone Mountain Approved

ViaWest’s Lone Mountain data center located in Las Vegas, was registered as a hosting center with the State of Nevada Gaming Control Board (NGCB).

“As a registered hosting center, ViaWest can continue its positive contribution to the Las Vegas economy by housing business-critical operations for the gaming industry,” states Michael Vignato, Las Vegas General Manager and Regional Vice President for ViaWest. “Our newest Vegas facility, Lone Mountain, has ample space to serve this growing industry and offers the highest levels of fault tolerance, security and energy efficiency. We look forward to continuing to support and serve gaming organizations throughout Nevada.”

Lone Mountain is the first Tier IV Design-Certified multi-tenant facility in North America. The data center has over 70,000 square feet of raised floor (For a closer look, see our photo feature. The facility touts an expected Power Usage Effectiveness rating of 1.2, thanks to the inherent dry climate of Nevada and design of the facility.

Switch First Approved by NGCB

Switch made the announcement last May that it was the first approved online gaming hosting center by the NGCB.

“Online gaming is poised for dramatic growth given Nevada’s approval of the industry earlier this year,” said Switch Executive Vice President of Colocation Missy Young. “Switch’s SUPERNAP is the first data center in the world with the official seal of approval from the Nevada Gaming Commission.”

Switch has a big footprint in Nevada, unveiling a second SuperNAP there last April. The company is having no trouble growing out in the desert, selling a whopping 19 megawatts there in a single month last August. The facility,opened in April 2013 and is fueled by CEO and founder Rob Roy’s patents in data center design, systems, and related industry technologies.

While Nevada is leading the pack here, New Jersey and Delaware are moving towards legalizing.  All three states will allow anyone within their borders and of age to gamble. Delaware is expected to offer online slots, poker, blackjack and roulette by the end of this month. Users will be able to gamble on their phones sometime in 2014. New Jersey says its online poker will kick off on Nov. 26.

About the Author

Jason Verge is an Editor/Industry Analyst on the Data Center Knowledge team with a strong background in the data center and Web hosting industries. In the past he’s covered all things Internet Infrastructure, including cloud (IaaS, PaaS and SaaS), mass market hosting, managed hosting, enterprise IT spending trends and M&A. He writes about a range of topics at DCK, with an emphasis on cloud hosting.

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