City might get involved in Internet gambling site

Angie Wagner

Wednesday, Nov. 1, 2000 | 9:28 a.m.

Las Vegas has never been a city too concerned with its image, but a proposal to put the city's seal on an Internet gambling site is raising questions. Should Las Vegas put its name on a practice that many consider illegal?

"It's a moral question," Bill Thompson, a UNLV professor and gambling industry expert, said Tuesday. "I've always had the position that government should be neutral on gambling."

It makes sense that the nation's gambling mecca wants in on the Internet betting action. Nearly 700 Internet sites offer online gambling, a business expected to grow from $1.1 billion in 1999 to $3 billion in 2002, according to a recent report for the online gambling industry.

A group of former casino executives and industry experts are hoping to set up VegasOne.com by April.

And, if the city lent its name and seal to the site, the company's executives think it would assure credibility.

The City Council is considering doing just that, but not just for the credibility. Las Vegas would make 5 percent of the site's gross revenues and 25 percent of its profits.

That could mean $90 million a year going toward much-needed city projects if the site generated $360 million a year, said Tony Cabot, a Las Vegas casino industry lawyer who represents developers of the site.

But Internet gambling is illegal in Nevada and some consider it illegal in the United States. Because of that, VegasOne.com will be licensed and regulated in Australia and only non-U.S. residents could use it to place bets.

The Justice Department contends federal law prohibits Internet gambling in the United States. Pending legislation supported by Sen. Richard Bryan, D-Nev., would clearly ban Internet gambling within the United States.

"The city is proposing to be involved in an activity that's not legal in the United States," said Bill Bible, chairman of the Nevada Resort Association, which represents the state's largest casinos.

"If it does become legal, you have the city competing against the state's largest taxpayer and largest industry."

Bible said Internet gambling also wouldn't create any new jobs, like casinos do.

"I think you have to carefully evaluate what is government's role."

Cabot sees it differently.

"The seal and the name are less important. What's really important is that the city provide the necessary oversight, so that persons who go on the site will feel comfortable that it is being adequately regulated."

Cabot argues that governments all over the United States are involved with gambling through state lotteries.

"At least here in the state of Nevada we've probably gotten over the moral issues."

Thompson said the proposal seems premature because of the legal status of Internet gambling, but if the city does place its seal on the website, players would know they are gambling on a reputable site.

"The consumer knows they're going to get a fair shake on odds," he said.

Thompson also said the city should consider sharing its profits with the county. That is an issue still to be addressed.

The City Council will ask VegasOne.com on Wednesday whether it will agree to a three-month trial run of its site without bets actually being accepted. Mayor Oscar Goodman proposed the trial period, but said Tuesday he will abstain from any more discussion and from voting on the proposal because his law firm had previously represented one of the company's investors.

"It has the potential to bring millions of dollars to the city for projects that need one-time funding," said city spokesman Erik Pappa. "The city has a lot of needs, everything from parks to projects that could re-energize the downtown area."