Internet gambling complaint filed

Friday, Dec. 17, 1999 | 11:03 a.m.

CARSON CITY -- The state Gaming Control Board Thursday filed a complaint against a Las Vegas company, charging that it allowed an Australian subsidiary to accept illegal Internet bets.

It was the first such disciplinary action brought in Nevada.

The 13-count complaint asks that fines be imposed for each violation against American Wagering Inc. and its subsidiary, Megasports PTY. LTD., for violating the regulation that prohibits Internet betting.

Victor Salerno, president of American Wagering, could not be reached for comment. But Bob Barengo, a lobbyist for American Wagering, said it will challenge the complaint. American Wagering has 20 days to answer the allegations, deny them, ask for a hearing or negotiate a settlement.

Megasports is licensed in Australia to conduct Internet gambling in that country.

The complaint says a control board agent in Las Vegas, using the bogus name of James Lawrence, used the Internet to open a $100 wagering account with Megasports. The money was deducted from the credit card account of Lawrence.

Between July 23 and Aug. 4, Lawrence placed 12 bets on Major League Baseball teams. At the end, he had a balance of $114 in the Megasports account.

Lawrence then sent an e-mail to Megasports asking to cash out and to send the balance to an address in the United States. He followed that up with a telephone call.

During the telephone conversation, an employee of Megasports said the money could be sent anywhere in the world but that bets could not be made from within the United States. Because Lawrence was located in the United States, the employee asked him to fax a birth certificate to Megasports. A fake birth certificate was faxed.

A day later, Megasports sent an e-mail to Lawrence saying the account had been locked until further notice. Nine days later, Salerno sent a letter to Lawrence saying, "Megasports hereby rescinds all wagers placed by you over the Internet through your account with Megasports."

The letter asked how Lawrence wanted his original $100 deposit returned, even though he had $114 coming.

Barengo said the agent actually went through Canada on the Internet to place the wagers. "They tried to get in through the United States and couldn't," he said. The connected to Megasports through a Canadian Internet service provider known as Netover Inc.

It's true, Barengo said, that the gaming agent made bets. But he was told that the company was checking to make sure the betting was legal.

The complaint said the Australian subsidiary of American Wagering failed to obtain verification of the identify of the board agent when he opened the wagering account.

"American Wagering failed to exercise discretion and sound judgment to prevent incidents which might reflect on the repute of the state of Nevada and act as a detriment to the development of the gaming industry," it said.

The complaint, drafted by Deputy Attorney General Derek Harmer, said each time the Australian subsidiary took a bet, it broke the law, which is a misdemeanor.

State regulations prohibit betting by fax, telephone or the Internet.