Tuesday, April 14, 1998 | 10:15 a.m.
The head of the Institute for the Study of Gambling at the University of Nevada, Reno sees similarities between today's spectacular, eye-popping casinos and the palatial movie theaters so common in the first half of this century.
"There are parallels between the movie and gaming industries," Director William Eadington said.
Modern technology spelled doom for those tremendous, arched palaces where movie-goers once could sit in luxurious splendor and lose themselves in the atmosphere created by the grandeur of surroundings that enhanced the film they were watching.
The question is, will modern technology have the same impact on those magnificent, billion-dollar casinos that surround gamblers with an alluring ambiance that enhances their betting experience?
"It is virtually all speculation at this point," Eadington said.
The technology that turned off the marque lights of lavish movie houses around the country and transformed them into drab, multi-screen, cracker-box units was television.
The technology that could potentially impact casinos and the gaming industry that is being debated by experts around the world is the Internet -- on which it is now possible to place bets around the world sitting in your living room using so-called "cyber-casinos" for "cyber-gambling."
"The evolution of television resulted in the 'malling' of movie theaters," Eadington said.
It is rare to see a stand-alone movie theater anymore -- usually they are grouped in large numbers, and small sizes, in shopping malls.
And VCRs and cable programming have allowed consumers to watch movies at home -- virtually whenever they want to -- at considerable less expense.
The only thing missing is the atmosphere of sitting in a darkened theater in front of a big screen sharing an experience with a large audience.
"There are obvious parallels with the casino industry, which is filled with large Las Vegas-style mega-casinos with all the whistles and bells," Eadington said.
Cyber-gaming is still in its infancy, but with the rapid way in which the computer world expands it could grow into a giant overnight.
Nations like Australia and New Zealand have legalized cyber-gaming, opting to take that route and creating stringent controls over the industry.
The United States, so far, is opposed to legalizing gambling online.
Congress now is considering the "Kyl Bill," sponsored by Sen. Jon Kyl, R-Ariz., and others, who based the proposed law on recommendations by the National Association of Attorneys General (NAAG).
According to the "Internet Gambling Book II," published earlier this year by Las Vegas gaming attorney Anthony Cabot, the bill has broad-based support from a variety of organizations, including some from the casino industry, NAAG, the Anti-Gambling Lobby, Gamblers Anonymous, consumer protection groups and some amateur and professional sports organizations.
The Kyl Bill, among other things, would:
* define "Interactive Computer Service" to include an information system that uses a public communication infrastructure or operates interstate or foreign commerce to provide or enable computer access by multiple users to a computer server, but exempts intrastate closed loop subscriber-based services.
* allow the U.S. attorney general or the attorney general of any state to seek an injunction to prohibit a violation of the new law.
* require the secretary of state to negotiate with foreign countries to reach international agreements to enable the United States to enforce its new law.
* make it unlawful for a person to place or receive a bet or wager through the Internet or any other interactive computer service.
* exempt bets or wagers by persons physically present in a licensed public facility that offers a state lottery, race or other wagering activity.
Frank Fahrenkopf, head of the American Gaming Association and one of those quoted in the book, said his group is opposed to Internet gambling now "because the technology does not exist today that would regulate the industry ... But in the long run, appropriate technology will be likely developed. Then the market place will take over."
Eadington noted that table games, such as craps and roulette, clearly need a casino setting.
"But slot machines and electronic games are far less linked to the ambiance. They are far less social, more isolated," he said. "Using other countries as guidelines, much of the demand for gambling on machines tends to gravitate to outside the casino.
"Spain has had a casino industry for 20 years and they also allow slot machines in bars and taverns, and that side of gaming is 10 times larger than their casino industry."
Slot machines dominate growth in Nevada, according to Eadington, and so if the new technology comes into existence and wide-spread acceptance consumers may opt for the isolation of their home.
Cabot, in his book, notes that television and computers are rapidly merging and there will be a day when they become one. Thus, the small screen could have a dramatic impact on both the film and gaming industries.
Eadington notes that Las Vegas may have unwittingly created at least a line of defense against cyber-casinos when it decided to diversify its own industry and tried to draw families who are interested in the experience of the city as well as in gambling.
"Look at the proportion of revenues generated by non-gaming activities in Las Vegas -- it's about 50 percent. Most casinos outside Las Vegas generate 80 to 95 percent of their revenue from gaming," Eadington said. "Las Vegas is diversifying the entertainment industry there.
"It has redefined the experience. Las Vegas has become a true destination resort experience, with fine dining, thrill rides, variations on museums and the like."
Though there is diversity, gaming still is the core, he notes.
"Atlantic City has not yet evolved. Neither has Northern Nevada, to a great extent," Eadington said.
The question remains, he said, as to whether destination resorts have more appeal than gambling in the home.
"My impression is, as with everything on the Internet, cyber-gaming is brand new and very flashy," said Eadington. "But it is very hard to see how it will develop. There are various risks. Companies can disappear overnight."
Cabot lists a number of obstacles cyber-gambling must overcome, such as creation of an adequate system for fund transfers, securing the gambling transactions from hackers, overcoming concerns of the operator's integrity, overcoming legals issues and competing for patrons' dollars with traditional casinos and other forms of Internet entertainment.
Eadington said the casino industry is threatened, but he doesn't know to what extent.
Cabot, who is with the law firm of Lionel, Sawyer and Collins, doesn't believe the impact will be has great as many may fear.
"I've looked at projections in the industry and they indicate, at its high point, the potential of cyber-gaming's impact is 10 to 13 percent of the gambling market by the year 2001," Cabot said. "Some of that will detract a little bit from Las Vegas, but it doesn't appear that it will have a significant impact because of the nature of the gambling experience.
"Most people who will be (gambling on the Internet) will be impulse gambling. The experience is significantly different (from a casino).
"I'm not too concerned about it. People will look at Nevada as a vacation destination."
But, Cabot agrees the potential impact is there.
"I'm facing up to the reality of it," he said. "I'm trying to do my best to study the impact, but it's hard to say where any of it is going.
"I don't see any major impact on the United States, but outside the U.S. it is very viable."
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