MGM Mirage Puts Reputation Online
By Linda
MGM Mirage opened its highly anticipated Internet casino last week at with little fanfare. This is because MGM knows that the venture puts its credibility is on the line. Company officials describe the opening as a 'soft launch' with low player volume, designed to test whether they really can meet the legal challenges involved.

The official grand opening is expected in about a month.

The casino, which is licensed in Britain, has a policy of refusing bets from residents of the United States, where it is illegal to offer gambling online. The company requires proof of foreign residence — no small task, given the challenge of knowing where someone is on the Internet.

Regulators in some states — particularly in Nevada, where MGM has six casinos, including the Bellagio — have said they are watching to ensure that MGM does not take bets from United States residents. Federal law prohibits offering casino and sports wagers to United States residents across state lines over telephone and the Internet, according to the Justice Department.

More generally, Internet gambling faces scrutiny from some members of Congress and religious and watchdog groups, who say that Internet casinos make it too easy for bettors to lose money rapid fire with the click of a mouse. In addition, the General Accounting Office issued a report this week warning that Internet casinos could be used for money laundering, perhaps by terrorists.

The entrance of MGM, one of the world's largest casino companies, indicates that US casinos are unwilling to sit on the sidelines as increasing numbers of people worldwide point, click and bet in what is already a $3.5 billion annual market, according to one analyst's estimate.

'We see billions of dollars being made out there,' said Bill Hornbuckle, president and chief operating officer of MGM Mirage Online. He said MGM had a chance to establish itself in a big way in a nascent industry that has been in great disarray, and to be ready 'if and when this comes to the US.'

Nevertheless, some of MGM's top land-based competitors say it is too soon to move into online gambling. David Strow, a spokesman for Harrah's Entertainment, which owns the Harrah's casinos, said the company thought there were 'too many unanswered questions,' including the difficulty of verifying the age and location of players. 'Until those issues are all resolved to any extent, we're not interested in participating,' Mr. Strow said.

MGM's online casino plans to offer craps, roulette, video poker, keno and several slot machines, with bet denominations from a few pennies to a maximum wager of $4,000 on roulette.

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