LV firm to run ‘Net lottery

Friday, June 25, 1999 | 11:06 a.m.

VANCOUVER, British Columbia -- Nevadans regularly drive to California or Arizona to buy lottery tickets.

But by the end of the year, the closest lottery will originate from Las Vegas -- though Nevadans won't be able to buy a ticket for it.

Casino Development Associates LLC is developing the World Lottery, a weekly drawing for $10 million, that will be conducted over the Internet.

Developers say if the proper combination of lottery numbers isn't selected, the prize will roll over to the following week, creating the potential of jackpots of more than $100 million.

But because Internet gambling isn't allowed in the United States, Americans won't be able to shell out $1 for a chance at the huge payout.

Steve Primak, chief executive officer of Casino Development Associates, said testing is expected to begin in October or November and the first lottery is targeted for December.

"It's the oldest game in the world," Primak said of the lottery concept.

Online lotteries were a hot topic Thursday at the inaugural Global Interactive Gaming Summit and Expo. While lotteries aren't common on existing Internet gambling web sites, several European nations are in the process of converting land-based lotteries to the Internet.

The Netherlands, which conducts a lottery that began in 1726, and Finland, which is netting $2 million a year, are undergoing changes that could take them into cyberspace.

One European nation that already has made the leap is Liechtenstein, which conducts its international lottery every week. Selling tickets for 5 Swiss francs apiece -- about $3.50 -- the lottery was the first to offer a $1 million prize.

Dom O'Neil, who markets Liechtenstein's lottery, said the weekly draw is supervised by Coopers & Lybrand, an accounting firm, and is broadcast on the Internet. Profits from the lottery pay for prizes, marketing and to benefit a philanthropic cause -- the International Red Cross.

With 25 percent of the handle going to the Red Cross, part of O'Neil's marketing ploy is to convince potential players to support a worthy cause.

Primak will have the same marketing potential. He said the World Lottery will support a charity or group of charities. He said a Casino Development Associates board could elect to support a different charity every week.

Primak is working to take his company public and said he currently plans to domicile the website in Costa Rica, although that could change.

Internet gambling companies routinely locate their Internet sites in countries that permit online gambling. Costa Rica competes with several Caribbean nations and Australia to host sites.

Primak said he will follow the conventional approach of blocking online transactions from the United States and Canada to the World Lottery. Americans will be able to access the site and test their lottery system theories at no charge. The site also will have historical information about lotteries.

Although Primak's lottery won't have a North American audience, he said he is encouraged by the exponential growth of Internet use in Asia.

Primak said lottery winners will be given the option of collecting an annuity over time or a lump sum. He said the company would offer a financial counseling service to new millionaires produced by the lottery.