Internet gambling firm invades LV with bus ads

David Strow

Monday, April 3, 2000 | 11:27 a.m.

Nevada casino operators and regulators have spoken out against it. Nevada law specifically forbids it.

It's the business of gambling over the Internet, and it is the fastest-growing segment of the gaming industry. And it is now being actively promoted in Las Vegas by an offshore casino -- whether or not the Las Vegas gaming industry approves.

Omni Casino, an Internet casino based in Antigua, inked a pact with Las Vegas advertising agency Fastlane Advertising to begin placing its advertisements and logos on shuttle buses running through downtown and the Strip. The first four shuttle buses to carry the advertising began appearing in Las Vegas last week.

The buses sport the slogan: "Win a Jackpot from Home."

Referring to the campaign as an invasion, Omni Casino bragged in a press release that it was a move "sure to ruffle the feathers of some Nevada casino owners" that "takes a stab at the big boys of Las Vegas, who have long dominated the casino industry, by promoting a virtual casino on their turf."

"It's an effort to gain some legitimacy over the land-based casinos," said Alex Roberts, spokesman for Omni Casino. "I know they create a lot of propaganda with respect to the offshore gaming industry. Obviously, they don't want the competition.

"We want to show people that come to Las Vegas that there's another alternative."

The Omni Casino ads will initially be placed on four chartered shuttle buses operated by Nevada Charter, a Las Vegas shuttle and tour bus operator. Over its 18-month contract with Fastlane, Roberts said Omni has options to place the ads on more than 50 privately owned Las Vegas buses.

The decision to run the ads came from Fastlane, rather than Nevada Charter. Fastlane has signed deals with a number of shuttle operators to run advertisements on their vehicles. Fastlane officials said they'd offered similar promotional packages to local casino companies, but that Omni was the first company to accept.

Riders on the buses will also be given CD-ROM discs containing software that can be used to access the online casino.

Under Nevada law, it is illegal to participate in online betting, and federal law specifically prohibits interstate wagering on sporting events. Federal law is not nearly as clear on whether other games of chance are banned on the Internet, though legislation sponsored by Sen. Jon Kyl, R-Ariz., would place all Internet gambling off-limits for U.S. residents if passed.

Both Omni and Fastlane say that, after consulting with their attorneys, they've determined they're not violating state or federal laws by promoting the casino or distributing the software. The software, Omni notes, can be used for purely recreational games, as well as gambling.

"There is no ban on advertising online casinos in Las Vegas," said Osvaldo Fumo, attorney for Fastlane. "Before we did this, we contacted the Gaming Control Board and spoke with an agent about that. The Internet is still in its infancy, and there's nothing on the books about (advertising)."

Nevada gaming regulators have aggressively worked to stop Internet gambling in the past. Last year the state Gaming Control Board initiated a complaint against Las Vegas-based American Wagering Inc., a company that operates an Internet sports betting service in Australia. Board investigators initiated the action after they claimed the service accepted a bet from within Nevada.

The case is still pending.

Steve DuCharme, chairman of the Control Board, said he didn't know if a board employee had consulted with Omni and Fastlane. But the only grounds for board intervention, he said, would be if the software was used by a Nevada resident to gamble.

"The illegal act would be placing a wager from the state of Nevada to the casino site in Antigua via the Internet," DuCharme said. "It's not something we regulate, as long as it's not used illegally in the state of Nevada.

"One small state can't be the world's policeman regarding these acts."

But if a Nevadan were prosecuted for gambling at the site, legal problems could emerge for the companies, an expert in Internet gambling law said.

Tony Cabot, attorney with Lionel Sawyer & Collins, said the companies could potentially be charged with aiding and abetting if a Nevada resident gambled at Omni. Even if the Nevadan didn't use the software, Cabot said, law enforcement officials could potentially claim the advertising itself constituted an illegal act by promoting the activity.

"It's illegal for a Nevada resident to gamble over the Internet on anything," Cabot said.

Federal law bans Internet wagering on bookmaking, parimutuel pools, lotteries or numbers, but is silent on whether games such as blackjack, craps, poker or slots are illegal through the Internet. Omni Casino does accept bets on sporting events, according to the company's website.

Federal law also specifically prohibits the distribution of paraphernalia used in illegal bookmaking -- and, in 1989, the 9th U.S. Circuit Court of Appeals ruled that software falls under the definition of paraphernalia under federal law.

"Clearly, federal law applies to software and sports books," Cabot said.

But Fumo disputes that interpretation. The disc should be viewed as an extension of the advertising campaign, he said.

Besides, the company isn't targeting Nevadans as its customers, Fumo said.

"They're focusing on the out-of-towners," Fumo said. "These buses are not on the routes that go from Galleria Mall to Summerlin. They don't want Nevadans to pick up on this. They want to give it to people who are leaving the Mirage or Caesars Palace and going home."

Even if a Nevadan chose to gamble on the site, he said, "they haven't aided them in any way."

"If the advertisement for an online casino was in Sports Illustrated, and they read the magazine and gambled online, I doubt they'd go after S.I. for aiding and abetting. Most online casinos do advertise in casino journals, and they're distributed in Nevada."

Ultimately, Roberts said, the responsibility for obeying local and federal laws lies with the customer.

"We're licensed by the government of Antigua to conduct business anywhere in the world," Roberts said. "We're well aware the U.S. is trying to stop it. If a jurisdiction says it's illegal, they shouldn't play. We leave it up to the responsibility of the player."

It isn't the first time Internet casinos have attempted to encroach on Nevada's turf. In February, Internet gaming company GoCall Inc. promoted two of its Antigua Internet casinos on an electronic message board at the Las Vegas Convention Center.

The signs are owned by ESCN, rather than the Las Vegas Convention and Visitors Authority. But after the LVCVA discovered the ads were running, it forced ESCN to pull the ads within days of their initial appearance.

"Had we known that advertisement was going to run before it did, we would have expressed our concerns, and it wouldn't have run at all," said LVCVA spokesman Rob Powers.

But that's not going to happen with the latest campaign, he said.

"Certainly, there are increasing forms of competition all the time, and there's not much as an organization we can do about it," Powers said. "What we can do is aggressively market the uniqueness of Las Vegas and encourage people to come here, even if they can gamble in another city or at home.

"The destination has positioned itself well in the past 10 years, in light of that competition. We're much better positioned now to do well in spite of growing competition in various forms of gambling."

Bonnie Siu, one of the owners of Fastlane, argues that her client's activities will only create more business for Las Vegas in the end.

"I feel that Internet gaming will motivate more people to experience live gaming," Siu said. "If you're interested in live action, then you're going to go to Vegas.

"Some of the (Internet gambling) companies we've talked to have expressed an interest in having access for their players to book rooms in Las Vegas. I see an alliance in the future."