Internet gaming hopes fade with MGM pullout

Jun 10, 2003 9:50 PM

Considered a low-overhead, revenue gold mine for U.S. casinos only two years ago, Internet wagering has fallen by the wayside here, while foreign website casinos continue to draw revenue from the American market where an estimated 60 percent of the worldwide online gaming market is based.

Last week, MGM Mirage, the largest American firm involved in online wagering, said it would shut down the website it had operated under a license from the Isle of Man in Great Britain since October.

The company, which was licensed by the Isle of Man government in September 2001, said it would take a $5 million loss.

While Internet wagering is considered illegal by the U.S. Department of Justice, MGM Mirage and other casino firms said they are frustrated that Congress has not moved on legislation that would permit American companies to tap into the multibillion-dollar online casino business and add legitimacy to it.

"We’ll bide our time and wait" for future reentry should online wagering be legalized, said MGM Mirage spokesman Alan Feldman. "We are waiting for Congress to change its perspective on this activity."

Meanwhile, MGM Mirage believes it succeeded in building a website that could operate under a strict regulatory framework, Feldman said.

"We feel we have done the work to prove that this activity can be administered with the same level of integrity as land-based casinos in the United States," he said. "We had operational integrity ”” we showed that ”” and we showed that it can be done in a regulated environment."

"It wasn’t difficult to operate on the Isle of Man, it just didn’t make business sense (to continue)," he said.

Opponents of Internet

ing in Congress have taken ideological positions against gambling itself, Feldman said.

That’s hypocritical, and fails to protect the many Americans who take their chances betting on the hundreds of unregulated casino websites based overseas, he added.

"They have access to the U.S. market, we don’t, and that’s not a level playing field," he said.

"From our point of view, under any other circumstances, people would be lining up to help the American consumer, but they (members of Congress) don’t because it’s about gambling."