|Las Vegas has turned cold on internet gambling. The latest move by the Nevada board to get tough on offshore sports books and casino operators is being back by the big land-based casinos, who say they must respect the law.|
'If a 16-year-old gambles away his family's income from a state where public policy flat out forbids it, then there will be a political backlash against us,' cautions Scott Scherer, a member of the Nevada State Gaming Control Board. However, he says that while internet bets are illegal in all 50 states,' but it may be that horse racing is the way forward since a number of other states have accepted betting on that.'
This has in turn been backed by well-known Nevada gaming corporations such as MGM Mirage from becoming involved in the market.
This has unsettled many in the internet gambling industry, whose business plans have long included the assumption that the state would be the first in the US to regulate internet gambling.
The reality is that Nevada is still very much restricted by Federal laws.
The 1961 Wireline act, drafted by Robert Kennedy as an anti-racketeering measure states that 'bets on sporting events are unlawful if placed over a phone line from a state where wagering is illegal.' This would apply to the internet.
Mr. Scherer believes that interactive gaming still has to clear several hurdles before it can be legalised, particularly on issues of security and age and border control. 'I think the technology exists,' he says, referring to GPS-based systems that locate the player's PC.
However, cost is the obvious impediment. 'It may be too expensive for many operators,' he says.
Mark Falcone, managing director of Deutsche Bank in New York and gaming industry analyst, believes the Nevada move is unfortunate.
'The Wireline Act is putting a tight clamp on what the State of Nevada can do and I don't think that will change until they get some visibility on what the Department of Justice will do next. Right now they need to enforce the law as it is,' he says.
MGM Mirage, the operator of several of Las Vegas's biggest casinos, obtained a licence last year to operate an internet casino located on the Isle of Man, but has delayed the activation of its casino there. 'It's going to happen when it happens,' MGM Mirage President and Chief Financial Officer Jim Murren said of the introduction of an MGM Mirage betting site. 'We didn't set a deadline for ourselves.'
'We said from the beginning we weren't going to go down this road at all without the cooperation and blessing of the respective gaming regulators who govern us.'