Future bleak for ’Net bets

Oct 1, 2002 4:57 AM

Internet gaming may be sailing toward long-term success, but a top regulator warned that Washington politicians are allowing the U.S. to miss the boat.

"People are going to bet on the Internet, while Congress likes it or not," said Frank Catania, president of Catania Consulting Group during last week’s G2E conferences at the Las Vegas Convention Center.

"Politicians need to protect the players instead of arresting them," Catania said. "Internet gaming can’t be stopped. Great Britain understands that and they are going to be way ahead of us in that area. The Isle of Man agreement is proof."

Tobin Prior, chief executive officer of Sun International Hotels, called on-line gaming "a dynamic environment that has seen the days of opportunism come to an end."

Prior, who allowed his South Africa-based company to become one of the early pioneers into worldwide Internet gaming, noted that those who enter into the business have to be committed for the long-haul.

"This isn’t an easy industry, particularly to regulate," Prior said. "However, there is a lot of potential. With more major companies deciding to enter the picture, it will be much tougher for the small names to compete."

Michael Martinez, vice president of marketing at WagerWorks, has seen the San Francisco-based company provide on-line opportunities around the globe for the Hard Rock and MGM-MIRAGE.

"There is great developing going on, especially in England," Martinez said. "This isn’t a bricks and mortars business anymore. "Steve Wynn is developing projects in Macao. Asia is gaining a lot of interest. Even SEGA has the opportunity to hold global tournaments through the Internet."

On-line casino games are legal in the U.S., provided no money is transacted.

"Americans can play for free," Tobin said. "We exclude places like the U.S., Japan and Germany from betting on our gaming site. It costs us a great deal of projected revenue but we believe in regulating the industry. That’s a hard thing to do right now."

Catania said it’s inevitable that major casino resorts in Las Vegas expand into the Internet.

"Land-based casinos have to be involved," he said.

"Now, names are being established. The lines of communication need to be kept open. I think regulators have done a good job making the companies toe the line. You don’t see company CEO’s taking the money in our industry."

As for next year, Catania predicted little will change.

"We’ll be back here talking about the same things," he said. "Washington won’t change. Frank Fahrenkopf (American Gaming Association president) is right. The U.S. is full of puritans."