Questions cloud city’s cybergaming project

Erin Neff

Tuesday, Oct. 31, 2000 | 11:16 a.m.

Residents had two chances Monday to tell the Las Vegas City Council what they thought about the use of the city's seal in a proposed Internet casino project.

And although concerns were raised about security and the city's potential liability, few residents expressed outright opposition to the idea.

With Mayor Oscar Goodman sweetening public opinion by floating the idea of a property tax rebate with proceeds from the deal, the only real resistance to the plan is coming from the gambling industry.

Nevada Resort Association Chairman Bill Bible said he thinks the council needs to think very carefully before entering into an agreement with VegasOne.com, a private venture backed by former gaming executives and gambling experts.

"I have a difficult time understanding why a city in the state of Nevada would lend itself to an activity, which is not legal," Bible said.

Gov. Kenny Guinn, U.S. Sen. Richard Bryan, D-Nev., and current casino executives such as Mark Dodson of Park Place Entertainment and Danny Wade of MGM MIRAGE also oppose the plan.

Despite those concerns, the council will ask VegasOne.com on Wednesday whether the company will agree to a three-month test run of its Internet project without real bets being accepted.

Jim Jimmerson, VegasOne.com's attorney, said he would propose the idea to the company's board of directors and have an answer for the council Wednesday.

The proposed casino would be based in Australia and target Internet gamblers outside of the United States.

During an online chat discussion Monday, Councilwoman Lynette Boggs McDonald said she wasn't convinced that the site could restrict users. As an example, she cited how Nevada Gaming Control investigators recently placed an illegal wager in Australia by routing through a server in Canada.

"I think we're in over our heads," Boggs McDonald said in her office as about a dozen chat-room participants typed questions for her and Councilman Michael Mack. "I don't know anything about this. I don't think we have the in-house capabilities, even in our city attorney's office, to handle this.

"I feel like we're a bunch of rookies in a high-tech area," she added.

Down the hall, Mack had fewer concerns and reiterated his suggestion that proceeds from the deal should be used to revitalize public schools with capital improvements to make them state of the art.

Under the proposed deal, the city would receive 5 percent of the gross gaming revenue and 25 percent of the net profits from VegasOne.com for the use of the seal. Internet gaming attorney Anthony Cabot told the council the casino could have a net win of $360 million annually by the year 2003, giving the city roughly $90 million.

"When government can't explore something like this, that's when we're in trouble," Goodman said Monday morning while checking in on the chat. "That's a huge chunk of money."

During a special council meeting Monday afternoon Goodman proposed a $180 property tax rebate for each city taxpayer. He also hinted Monday that VegasOne.com would need to advance the city millions of dollars -- perhaps as much as $10 million -- to set up the needed regulatory body.

Cabot agreed that regulation was VegasOne.com's goal in order to validate its site in a cyberspace arena where dozens of online casinos already use some form of the name Las Vegas.

But Cabot stopped short of agreeing to Goodman's proposal that VegasOne.com "spare no expense" in establishing the city's regulatory function, preferring to negotiate terms of the contract in private.

VegasOne.com officials spent the weekend conducting new phone polls and inviting residents to Monday's meeting to receive a commemorative casino chip.

The polls placed support for the project at 81 percent and the black and white fictional chips worth $1 million were scooped up by residents and media attending the council session.

Richard Bratton, a 37-year Las Vegas resident, who declined to pick up a chip said he thinks the deal is "opening Pandora's box."

"This should go to a vote of the people," Bratton told the council during the afternoon meeting.

Bratton also hinted that political futures hung in the balance of the vote.

Earlier in the day Goodman vowed not to approve the venture if the council was not in total agreement.

"If we don't have unanimity on this, we're not going to go forward," Goodman said after talking with Boggs McDonald about her concerns. "Political careers could be at stake here."

City Councilman Gary Reese said the vote is probably the most important of his six-year council tenure, yet the barber seemed uncomfortable asking high-tech questions.

"Isn't it true all Internets can be broken into?" Reese asked.

Nathan Damiano, technical director of Gaming and Internet Technology, told the council the online casino will take every security precaution available, including "military strength" encryption, two firewalls and one-way algorithms to prevent the storage of passwords.

The technical terms didn't sit well with the majority of council members. Earlier in the day, when Goodman walked into Boggs McDonald's office during the online chat, he thought he had to be quiet.

"You mean you can talk?" he asked.

During the chat, Mack got bounced offline and couldn't log back in for several minutes.

"Technology slowed me down," he typed when returning.

Joe Marcella, the city's Information Technology director, told the council he was satisfied with the level of encryption described by Damiano.

But in an interview, Marcella admitted no one on his staff is familiar with gambling software, especially the type designed for millions of users.

"We'd like to test it, especially if we're supposed to regulate it," Marcella said.