Vegas casinos linking up for Internet venture

February 19, 2002 7:44 AM
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A group of mid-size Las Vegas casinos is banding ­­together to test an Internet gaming portal in Nevada, well-placed sources tell GamingToday.

The move is a bold one, considering that Congress is weighing bills to outlaw online wagering. But industry insiders say that competition from the Isle of Man and other offshore venues has put Net gaming development on the fast track.

“We need to test it or we’ll be left behind,’’ said one gaming executive who asked not to be identified.

None of the casinos contacted by GamingToday acknowledged being part of the consortium that is said to number eight to 12 members. But Steve Urie, president of GAMET Technology, confirmed that his Reno-based company is heading up the venture dubbed “Nevada Interactive.”

GAMET, which develops cash management and identification systems for casinos, sees the web venture as a springboard into the virtual gaming market that some analysts peg as a $10 billion business.

“There’s been a lot more interest since Park Place (Entertainment) warmed up to the Isle of Man,’’ said one source. That was a 180-degree turnaround from last fall’s gaming conference, where Park Place President Tom Gallagher declared that his company would not pursue Internet gaming because of knotty legal and logistical hurdles.

The Nevada online initiative also signals a strategic shift from earlier intentions to seek a license from Britain’s Isle of Man. “Instead of paying for a license there, the thinking evolved to doing a test here,’’ Urie said.

Nevada Interactive, some believe, could dovetail with Las Vegas Mayor Oscar Goodman’s desire to market the city’s name on an Internet gaming site. With local companies in the mix, they could have the inside track to any licensing agreement.

State regulators say they know nothing about the consortium’s venture, but both the Gaming Control Board and the attorney general’s office have designated staffers to monitor Internet development here and elsewhere.

GAMET is betting on the come. “Mid-tier casinos will see a tremendous upside with the Internet, and we’ll see sites coming back from the Isle of Man. It will be a lemming effect,’’ said chief financial officer Tom Grossman.

Stations jumps onto the Net

On Friday, Station Casinos jumped into the Net, announcing plans to partner with South African gaming mogul Sol Kerzner on a web-based gaming venture. Station said it will pay $5 million for half ownership of SunOnline Ltd. SunOnline also holds an Isle of Man license.

Neither MGM nor Station said they had anything to do with the Nevada Interactive project. Said one exec: “We’re not into cannibalizing our own customer base.’’