Playing the waiting game

June 11, 2002 11:49 AM
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WagerWorks chief executive officer Andrew Pascal sees his company as a bridge to legalized Internet gaming.

"It’s here to stay," Pascal told GamingToday during a visit to Las Vegas from the company’s San Francisco office. "We want to see this industry regulated and taxed to the benefit of the host jurisdiction, whether it’s Nevada or the Isle of Man."

WagerWorks, which focuses on the table games market, works in association with Orbis in providing systems to overseas jurisdictions such as Australia, Great Britain (Isle of Man) and Alderny (off the English coast).

"We offer the broadest, richest array of games you’ll find on line," Pascal said. "All our activities are overseas, but we understand that Internet gaming in many areas is illegal from the United States and we fully intend to comply with those restrictions."

Orbis deals with the sports betting overseas, which is ­­illegal from the United States.

Pascal, in fact, agrees with Nevada’s hardline position against Internet gaming and understands the volatility of the business.

"As a supplier, we want to conduct business with integrity," he said. "Nevada has a great attitude about the gaming industry. We love this industry too and would never do anything to break the law. That’s why we have been patient with how the regulators have treated the issue."

Last year, Nevada passed enabling legislation that could lead to some form of legal online or modem-to-modem wagering. Nevada regulators so far have taken a cautious approach, and have indicated they may draft regulations for in-state interactive betting as "a good first step."

The goal of WagerWorks, according to Pascal, is to create an online casino that the company can market.

"There is no timetable, except that the final product is demonstrated beyond any doubt to be responsibly operated," he said. "Our business is focused internationally. It is legal and well-regulated. We think we can make the most of the market that exists today."

MGM Mirage is the only customer engagement that WagerWorks has announced, but Pascal admitted that others are in the fold and more are in negotiations.

"There is a great deal of interest among domestic and international operators," he said. "It took nine months for us to get a license in Alderny and over a year in Australia. The MGM Mirage has a license at Isle of Man, so we haven’t felt the need to get one just yet."

WagerWorks see table games as being a good marketing opportunity globally, particularly roulette and blackjack.

"The games are crude right now," Pascal said. "There are a lot of games we have developed that we are anxious to market online. The opportunity internationally is great."

WagerWorks was born out of Silicon gaming, which was focused on bringing new technology and media practices to updating the experience of playing slot machines.

"All of our planning is focused on the international markets, so if the Internet never opens up in the United States, it won’t affect our modeling or planning," Pascal said. "We hope that it will and should be done responsibly in the U.S. It would be very compelling and would stimulate more growth. But, if it never happens, it doesn't happen."

When asked about all the dot.com companies that advertise in Las Vegas and across the country despite the government’s stance against Internet gambling, Pascal admitted he thought the promotions and campaigns were strange.

"It really is curious," he said. "Clearly people want to participate in online gambling. However, it is illegal and you don’t know overall what you’re getting into. There are doubts about some of the (offshore) regulators, as we have said. That’s why we side with Nevada’s stand. We also know this is a $2 billion industry (in 2001) that is not going to go away and that it can be regulated.

"The credibility of the industry is damaged every time a wager isn’t effectively booked or a wager isn’t effectively paid off," Pascal said. "People would rather do business with a trusted company that is regulated. Mechanisms must be in place to lodge a complaint and have it be reviewed and processed."

For now, WagerWorks pushes forward looking for more outlets.

"Online gaming would definitely stimulate new business in Las Vegas," he said.