Online gaming not (yet!) dead in the water

September 03, 2002 10:37 AM
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Internet gaming is dead. Long live Internet gaming.

The U.S. Justice Department’s recent opinion that "federal law prohibits gambling over the Internet’’ was not unexpected. Affirming earlier interpretations of the 1962 Wire Act, the Bush administration simply reiterated existing policy.

Now that Nevada gamers know the ground rules, they are proceeding on several fronts.

”¡ Overseas. MGM Mirage, the Venetian and Station Casinos continue to move forward with Net ventures based in Europe, which permits online gaming.

”¡ In Nevada. Since the Justice decision has no effect on in-state gaming, Nevada casinos are developing a variety of in-room and intra-property products.

 ”¡ In Congress. The Wire Act was written by Congress. So it can be rewritten by Congress. And with states looking for new income sources, experts predicts that interactive gaming will be part of the tax mix.

Dennis Neilander, chairman of the state Gaming Control Board, said Nevada will continue to explore all options available to casinos. The Legislature has already authorized Internet gambling and regulation and testing will go forward, officials said.

Meantime, MGM Mirage is pumping some $20 million into its Internet betting site on Britain’s tiny Isle of Man. Last month, GamingToday reported that MGM Mirage and WagerWorks combined to launch another Isle of Man site, HardRockCasino.com.

Venetian Casino Resort Athens LLC has applied for an Internet gambling license in Alderney in the British Channel Islands. The company owned by Sheldon Adelson did not reveal its partners.

Station Casinos has hedged, converting its agreement to buy 50 percent of Sun International’s Isle of Man site into an option. But it still has $4.5 million on the line.

Las Vegas’ major casinos know that the Internet is potentially the best and cheapest tool to tap the multibillion-dollar global gaming market. And even the most anti-industry politicians recognize that offshore wagering operations are siphoning U.S. funds every hour of every day.

"Internet gaming revenue projections imply that a percentage of [betting revenue] is from our citizens and leave the United States with no subsequent benefit, directly or indirectly, to the U.S. or any state,’’ says Frank Catania of the Interactive Gaming Council.

An estimated 1,600 gaming web sites are currently in operation, up sharply from just a year of the state Gaming Control Board, said Nevada will continue to explore all options available to casinos. The Legislature has already authorized Internet gambling and regulation and testing will go forward, officials said.

Meantime, MGM Mirage is pumping some $20 million into its Internet betting site on Britain’s tiny Isle of Man. Last month, GamingToday reported that MGM Mirage and WagerWorks combined to launch another Isle of Man site, HardRockCasino.com.

Venetian Casino Resort Athens LLC has applied for an Internet gambling license in Alderney in the British Channel Islands. The company owned by Sheldon Adelson did not reveal its partners.

Station Casinos has hedged, converting its agreement to buy 50 percent of Sun International’s Isle of Man site into an option. But it still has $4.5 million on the line.

Las Vegas’ major casinos know that the Internet is potentially the best and cheapest tool to tap the multibillion-dollar global gaming market. And even the most anti-industry politicians recognize that offshore wagering operations are siphoning U.S. funds every hour of every day.

"Internet gaming revenue projections imply that a percentage of [betting revenue] is from our citizens and leave the United States with no subsequent benefit, directly or indirectly, to the U.S. or any state,’’ says Frank Catania of the Interactive Gaming Council.

An estimated 1,600 gaming web sites are currently in operation, up sharply from just a year ago. And the betting rolls on despite pressure on credit card companies and other conduits such as PayPal to choke off the cash flow.

The Interactive Gaming Council, a trade group with more than 100 member companies worldwide, has called on Congress to develop strict regulations to ensure the safety and reputation of legalized gaming.

"The question before Congress is not whether or not we will have online gaming ”” you most certainly will, unless you ban the Internet itself ”” but the question is whether you will have well-regulated, above-board online gaming or unregulated, underground online gaming,’’ Catania told a congressional committee late last year.

Nevada gamers believe that rigorous testing of intrastate betting could be a model for other states and the entire nation. Station Casinos has been particularly aggressive in this area, developing GameCast technology that accepts remote bets via video terminals, wireless pads, televisions and home computers.

Effective age and border controls are advancing, and several vendors will be displaying their wares at the upcoming Global Gaming Expo. Several interactive gaming panel discussions are also on the program. Two local experts ”” Tony Cabot of the law firm Lionel Sawyer and Collins and Richard Fitzpatrick of the Interactive Gaming Institute ”” will speak on "Prospects for Internet Gaming." So stay tuned.