|CITY COUNCIL HEARS 'NET GAMBLING PLAN
By KEVIN FERGUSON
lasvegas.com GAMING WIRE
Monday, October 30, 2000
LAS VEGAS - A proposed Internet gambling site with
ties to the city
of the Las Vegas could have a three-month trial period.
Mayor Oscar Goodman proposed the test run during a Monday
Council meeting to consider whether such a site should operate with
the city's official name and seal.
Las Vegas lawyer James Jimmerson, who represents a group
longtime casino executives pushing the plan, said he was unsure
whether his clients would approve a trial period.
"My suspicion is that they would support it," Jimmerson
following the afternoon meeting, "but I don't want to overstep my
City officials are considering the proposal by vegasone.com
Las Vegas' official seal to the site, as part of a money-making
effort to raise millions of dollars for city programs.
Las Vegas casino industry lawyer Tony Cabot, who
developers of the proposed site, said the Web address could
conservatively generate $360 million a year, with $90 million going
to the city of Las Vegas.
Last spring, the City Council approved a $321 million
the current fiscal year.
According to the terms of their proposed licensing
the city, the group of Las Vegas-based executives would use the city
of Las Vegas name and official seal on their vegasone.com Web site
exchange for 5 percent of the site's gross revenues and 25 percent
Company executives believe the seal would give their
competitive edge with skeptical online gamblers who are wary of many
of the estimated 1,000 Internet betting sites.
City Councilman Larry Brown questioned Monday if
the city should
join with a private company in a business venture.
"Where do we draw the line between partnering with
a company and
overseeing it? What is our role as a government agency?" Brown
wondered aloud. "I'm interested in moving forward with this, but we
need to move forward incrementally. I'd like to see more public
dialogue of what we are contemplating."
The company's board of directors includes Jimmerson; former
Palace boss Dan Reichartz; ex-MGM Grand boss Larry Woolf; former
Nevada Gaming Control Board Chairman Phil Hannifin; International
Game Technology founder Si Redd; and USA Capital's Tom Hantges.
Hannifin is vegasone.com's chairman, and Redd is the vice chairman.
Jimmerson said USA Capital's Hantges has committed
toward the venture.
Citing figures from the Wall Street Investment banking
Bear, Stearns & Co., Cabot predicted that Internet gambling will
generate $6.3 billion in yearly revenues by 2003.
"If 50 percent of those bets are being made by the
U.S., and we
garner just 10 percent, that's $360 million," Cabot said.
Jimmerson said he will tell the council Wednesday whether
client's will agree to the proposed trial period although board
member Woolf said Monday evening it was too early to say if he'd
support such a move.
"We would be willing to look at the issue very closely,
can't give an answer since I wasn't at the (City Council) meeting and
am not aware of the context in which it was given," Woolf said.
Jimmerson said he doesn't see any reason why his
members would not accept a practice run.
"They may ask for a longer trial period, like a year,"
"but I'm sure they are willing to work with the city."
The City Council would have to vote to determine whether
seal could be placed on the site.
Ten people testified at Monday's public hearing,
wondering whether the city would be held liable if minors and others
accessing the site from within U.S. borders were caught gambling.
Lawyers at the U.S. Justice Department believe federal
prohibits Internet gambling within U.S. borders, and legislation
supported by Sen. Richard Bryan, D-Nev, is working its way through
the House and Senate to clearly ban Internet gambling within the
Jimmerson said numerous fire walls or security checks
taken to prevent illegal betting and a city-appointed board could
define acceptable advertising for the site.
He noted that vegasone.com would be licensed and regulated
Australia to avoid Nevada's prohibition against Internet gambling.
Its Web server would be based overseas, possibly in Australia or
Council members as well as some residents raised
concerns of an
online gambling site with the Las Vegas' seal possibly harming the
city's reputation if the site conducted itself in an unethical
manner, such as accepting X-rated advertisements.
"I think anything of this magnitude should go to
the vote of the
people," resident Richard Bratton said. "This is very very
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