|INTERNET GAMBLING VENTURE FACES CHALLENGES
Thursday, November 02, 2000
By KEVIN FERGUSON
LAS VEGAS - It has been done before, but with innocuous
items and minimal success.
This time the idea of licensing the city of Las Vegas
seal to a private
business has created a new set of issues.
Many question if it's ethical to lend the city's seal
to a Web-based casino, vegasone.com, a business that legally cannot cater
to U.S.-based gamblers.
"I think it's a contradiction to have an online
gambling site with
a Las Vegas city seal when Internet gaming is illegal in Nevada,"
said Brian Sandoval, chairman of the Nevada Gaming Commission.
Nevada gaming regulators would have no jurisdiction
vegasone.com, because operators of the site intend for it to be based
Yet, some continue to doubt that Web-based casinos
bar minors or U.S.-based gamblers, often citing a past sting
operation by Nevada regulators on one of its licensees, sports book
operator American Wagering.
"I don't feel the technology could be put in place
to keep out
people who live in jurisdictions where its illegal, based on the
Australian case that allowed someone to place a bet going through a
Canadian business," Councilwoman Lynette Boggs McDonald said at a
recent council meeting.
In a July 1999 case, a Nevada Gaming Control Board
in Las Vegas
opened an Internet account using a Canadian Internet service
provider, and opened a wagering account under a fictitious name with
As a result, American Wagering, the owners of Australian
site, were ordered by the Nevada Gaming Control Board to divest
itself of the Australian Internet business.
Sebastian Sinclair, an Internet gaming analyst of
Christiansen Capital Advisors, said there is "no magic bullet" to
block U.S.-based gamblers from accessing a site, but there are
solutions than what was being used by American Wagering.
"The best security options are the ones that
are being used for
fraud protection," Sinclair said.
James Jimmerson, a lawyer and board member of vegasone.com,
the site would have a "military strength" firewall to keep out
hackers, comparing it to just below financial institution security.
The company's board is loaded with former
Nevada casino chiefs,
such as Dan Reichartz, formerly of Caesars Palace, and Larry Woolf,
of MGM Mirage forerunner MGM Grand Inc.
Vegasone.com's initiative lost steam this week when
Goodman and Councilman Michael Mack said potential conflicts of
interest have forced them to withdraw from the debate, vegasone.com
executives still hope to win over a shaky council on Nov. 15.
If the majority of the five remaining council members
favor of vegasone.com, this won't be the first time the city has
licensed its seal to a private business.
Four years ago, city officials licensed it to Global Licensing
Ltd., which allowed the company to set up contracts with souvenir
retailers seeking the city seal.
But the deal wasn't the jackpot the city had hoped,
$20,000 in four years of selling items like T-shirts, hats and other
"It didn't happen on the grand scale that we had hoped,"
Hasegawa, manager of business operations.
Under the contract, the retailers agreed to pay
a 7 percent
royalty fee on all items that advertised the seal. The city received
60 percent of the royalty fee. The contract expired last February.
City Attorney Brad Jerbic said the deal was granted
the go ahead
after the City Council discussed it at a public meeting.
He noted that is the role of the City Council.
"The seal is owned by the city of Las Vegas, and
the City Council
is charged with making decisions with city affairs and city marks,
including the city seal," Jerbic said.
What's unique in the vegasone.com debate, the company
an exclusive licensing agreement without going through a competitive
bid process. Some council members doubt the fairness of such a deal.
"I question the role of government," Councilman
Larry Brown said.
"We are being asked to partner with a company that will compete with
other companies in the industry."
lasvegas.com Gaming Wire
Phone: (702) 383-0478
Fax: (702) 380-4590