|SOFTWARE INTEGRITY KEY TO ONLINE GAMBLING
Thursday, 8 Feb 2001
By KEVIN FERGUSON
LAS VEGAS - Internet gamblers are quick to question
of Web-based casino games when they encounter technical glitches that
make the games stall or fail, industry observers say.
In fact, the industry will have trouble appealing
mainstream public until such problems are resolved, observers agree.
"The biggest question about these sites from a player's
point-of-view is: Does the game offer the player a fighting chance
win?" said Tam Lee, an Internet gambling expert who reviews e-casinos
Lee said a player's suspicion of a rigged game arises
online blackjack player is dealt a pair of cards totaling 11, and
increases his or her bet, anticipating that the next card dealt will
be a 10 or a face card.
And then a technical glitch locks up the game.
"It scares you when the game stalls at that point, and
wind up with a two," Lee said. "It's not likely (the game's
operators) are changing the cards, but it raises questions to the
The Internet gambling industry is expected to grow
of about $1.5 billion in 2000 to $6 billion by 2003, according to the
New York investment banking firm Bear, Stearns & Co.
More than 800 Internet gambling sites exist,
most of which are
developed by about a dozen software companies, according to
Tony Cabot, an Internet gambling lawyer for the Las
law firm of Lionel Sawyer & Collins, said four software makers
strong hold on the market: Starnet of Vancouver, Canada; Microgaming
of South Africa; CryptoLogic of Toronto; and Boss Media
Games developed by the software industry leaders
a smaller chance of winning than their smaller competitors, but are
likely fairer than games provided by the smaller operators, Lee said.
"CryptoLogic offers about a 98 percent return on
video poker and
blackjack, but of course, the rules are such that the casino's odds
may be a bit higher due to player mistakes," Lee said.
"If you want better odds than what the major software-makers
offer, you have to venture a bit off the beaten path, but if you do
that you risk security."
Most software-makers charge an Internet casino between
$250,000 to develop a Web-based casino, with software companies
receiving as much as 30 percent of the gaming win generated by the
site, Lee said.
Canadian and U.S. laws prohibit most forms of Internet
from within their borders, so most Internet casinos are based on
offshore islands, where regulations tend to be lax or non-existent.
Some industry observers say if Internet gambling
were allowed in
extensively regulated environments, such as Nevada or New Jersey, the
largest U.S. casino operators would have a major edge in seizing
control of online gambling.
"If Harrah's Entertainment or Trump or (Park Place
go online, they will become the 800-pound gorilla," Lee said.
Harrah's offers casino-style games for prizes on
site, developed by software-maker Chartwell Technology of Calgary,
Canada. Harrah's also has a strategic alliance with iwin.com, aimed
at channeling Web traffic to each other's site.
Analysts say games-for-prizes Web sites are one
step from being
converted to games-for-cash sites, if and when U.S. gaming
regulators permit the practice.
A federal proposal to ban the practice is expected to
once again be
introduced in the House and Senate, where prior proposals have
In Nevada, Assemblywoman Merle Berman, R-Las Vegas, plans
introduce a bill during the state's current legislative session that
would legalize Internet gambling within Nevada's borders.
New Jersey legislators are debating a similar
proposal to allow
companies with Atlantic City gaming licenses to operate Internet
Berman did not return a Thursday phone message
left at her
legislative office. Nevada Gaming Commission chairman Brian Sandoval
said he has viewed a draft of her bill.
"It's a broad-based bill that leaves the policy
legalizing Internet gambling to the Legislature, and the security
issues to the Gaming Commission and the (Gaming Control) Board," he
Sandoval noted that Nevada regulators need to be
lnternet casinos seeking to operate in the Silver State can prevent
gambling by minors and people living in jurisdictions where e-gaming
is not permitted.
But some industry observers doubt a continued prohibition
Internet gamblers in the United States will slow growth of the
"Starnet has jurisdictional blocking software, which
accept Internet gamblers in Canada, but the vast majority of the
software makers don't care (about regional prohibitions)," Lee said.
"I don't think that's going to change."
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