Nevada Bets on Online Gambling
Digital casinos are big business, and the race is on to legally deliver Las Vegas-style action to your PC.Frank Thorsberg, PCWorld.com
LAS VEGAS-- It's too soon to make a virtual visit to the Strip and place a legal bet with your PC, but Nevada desperately wants to be the first state to make gambling lawful on the Internet.
The casino industry took up the multifaceted issue at the first annual Interactive Gaming Expo and Conference here this week. The gathered gaming industry experts salivated over the estimated $3 billion per year that's going into offshore Internet betting operations.
But casino operators must unclog a worrisome, 40-year-old legal bottleneck in order to bring U.S.-based online casino gambling to you at home, in the office, or on the road.
The 1961 Wire Act is a federal statute that the U.S. Department of Justice interprets as a ban on Net casinos because the law restricts interstate betting on sports events and contests by telephone or wire.
Despite the U.S. prohibition, online wagering exists all over the Net. About 1400 betting sites are operated by an estimated 200 to 300 companies. They offer action on games like blackjack, poker, craps, roulette, and slots plus interactive wagering on sports events and horseracing.
Solving Legal Puzzle
Only a handful of states--principally Nevada, New Jersey, and Mississippi--allow casino-style gambling, so it is doubtful they or other states will embrace Internet-borne betting that crosses jurisdictions. A number of Native American tribes also operate casinos in several parts of the country, outside the jurisdiction of state governments.
Casino operators agree the easiest way to get domestic online gambling rolling in the United States would be to limit it to a Nevada-only clientele.
To that end, Nevada Assembly member Merle Berman's Internet gambling bill was approved in June with the proviso that state regulators flesh out details of implementation and enforcement issues--such as security; reliability; and player identification, verification, and location--before enactment.
She hopes the law can be enacted by June 2002 so Nevada can compete for the jobs and tax revenue that could be generated by the emerging industry.
"No opportunity is ever lost," Berman says. "Someone else seizes the ones you missed."
Playboy's Online Bet
Christie Hefner, chief executive officer of Playboy, told the conference that Interactive gaming is "the next great app" that can link community, entertainment, and competition on the Web.
She says there will be even greater opportunities to jazz up static games with online-only features and create new contests that push the limits of entertainment and interactive technology.
Some casino industry players point to Playboy and other powerhouse entertainment and technology companies, like Microsoft and Viacom, as best bets to bring legalizing gambling to your computer before bricks-and-mortar companies can control the game.
Hefner says Playboy, through its global operations, has been able to play the gambling card in countries where betting online is already legal. In August, the company launched PlayboyCasino.com, its international gambling site.
Playboy is partnering with London-based Ladbrokes eGaming, the betting and gaming division of Hilton Group, in its online gambling business, which also includes a sports wagering site, PlayboySportsBook.com, and PlayboyRacingUSA.com, an online wagering site for pari-mutuel horseracing.
Taking Bets Overseas
Smaller online betting operators first set up shop overseas, especially in the Caribbean, where regulations are few and far between. Big U.S.-based gambling companies like Harrahs, Hilton's Park Place Entertainment, and Mandalay Resort Group have mostly remained on the Web casino sidelines.
That scene began to change September 20, when MGM Mirage won an Internet gambling license from the Isle of Man, a British dependency that has legalized online casinos. Other casino operators are taking a wait-and-see attitude. Some countries, like Britain and Australia, are moving ahead with their own Net gaming initiatives, and Nevada regulators are pushing to expedite Internet betting legislation.
If Nevada is slow to approve Net games, the state that rules legal betting in this country may lose out entirely on the rush to legitimize an industry that has gained an offshore foothold.
"We'll solve the technical issues; the problems will be in the political arena," says Richard Fitzpatrick, chief executive officer of the Interactive Gaming Institute of Nevada. The IGI is a nonprofit group created to promote interactive gaming in Nevada.
The Net gambling conference dovetailed with the downturn in air travel and tourism that followed the September 11 terrorist attacks on the Pentagon and New York City. In the weeks after the attacks, traffic to the usually bustling Las Vegas strip has dropped dramatically. Hotels and service companies laid off or furloughed thousands of workers until room occupancy rates can recover.