Privacy concerns arise in Internet gaming review

Kevin Ferguson

Wednesday, Aug. 1, 2001 | 10:40 a.m.

Nevada and Australian gaming regulators appear to vary on at least one significant element of regulating Internet gambling: how to curb activities of problem gamblers.

Stephen Mulcahy, chairman and chief executive of Syndney, Australia-based Access Gaming Systems, said the Australian gaming industry keeps a central database of "known" problem gamblers, who are black-listed from wagering in Aussie cybercasinos.

That point didn't sit well Tuesday with Nevada Gaming Control Board members Bobby Siller and Scott Scherer, as they listened to Mulcahy and other international industry observers talk at a Las Vegas seminar about their experiences with the regulated Internet gambling industry.

"We have some serious privacy issues here," Siller said of casinos collecting and sharing data about gamblers. "They may be able to do that in their country, but I don't think we want to do that here."

Scherer questioned who would be qualified to determine that someone was a "problem gambler."

"It's one thing if a person labels himself as a problem gambler, but it's quite another thing if a company puts a label on him," Scherer said.

The two-day Internet gaming seminar held at the Charleston campus of the Community College of Southern Nevada was for Nevada regulators to learn the challenges of regulating e-gaming.

The 20001 Nevada Legislature passed a bill paving the way for cybercasinos if and when regulators believe controls can be put in place to protect the integrity of Nevada's gaming industry.

At least four of Tuesday's speakers were consultants or company executives of Australian gambling companies. Australia is considered to have one of the most mature regulated Internet gambling industries.

But when Mulcahy noted that the Australian federal government banned Australian companies from accepting Internet casino wagers from its citizens in June, Nevada regulator Siller was taken aback.

"It makes me more cautious. We have to clearly learn and understand the issues we face before allowing it," Siller said.

Mulcahy said the Australian ban only refers to web-based casinos, which offer games like virtual slot machines and card games. He said there is no ban, however, on web-based race and sports books.

Mulcahy, whose Access Gaming company developed software for various European gambling sites, said the French Internet lottery places a player's loss limit per week at $400.

Park Place Entertainment Corp. Chief Executive Tom Gallagher also voiced a note of caution.

"This is an issue that is hardly suitable for a race among domestic and foreign jurisdictions to see who can get their first," Gallagher said. "Internet gaming involves a number of complex legal, technical and social issues."

Park Place, owner of casinos and strong brand names like Caesars and Bally's, already has a stake in an Internet-based gambling site.

Park Place owns 19.9 percent in Jupiters Ltd, an Australian company that operates land-based casinos and centrebet.com, a cybersports book in the Northern Territory.

Park Place inherited its stake in Jupiters when Park Place spun out of Hilton Hotels Corp. in 1998.

Nevada regulators have said Park Place can retain its stake in Jupiters as long as Park Place is not involved in the operations of the web-based sports book, and centrebet doesn't accept wagers from American-based computers.

Park Place spokeswoman Debbie Munch said the company is also considering whether to apply for an Internet gaming license on the island of the Isle of Man, located off the coast of Great Britain. Competitor MGM MIRAGE has already applied.

Other Internet gaming issues raised Tuesday involved player location verification and blocking minors from participating.

Stephen Williams, chief technology advisor of the recently formed Interactive Gaming Institute of Nevada, said cross-checking multiple forms of identification can solve some of those problems.

For example, Internet casino companies can cross-check a person's address through a driver's license, a utility bill, and a bank account or a credit card, said Williams, a former chief technology officer of America Online.

Williams said some e-commerce companies have established unique verification methods to prevent unauthorized people from accessing an e-commerce account.

"Companies like eBay require people to verify the amount of the first two deposits they made in the account and the date of those deposits," Williams said.

Access Gaming's Mulcahy said Austrian gamblers have to appear in person to purchase a scratch card from a lottery vendor in order to access the Austrian e-lottery. The vendor then checks the person's identification.

The scratch card provides an access code that has to be entered into the website to participate.

Some software makers are marketing devices that scan fingerprints on a computer's mouse or scans the retina of a gambler's eye to determine he or she is the person legally registered with the site.

Mulcahy said those devices take the verifying process too far.

"That's like putting people who walk into a Las Vegas casino through a carbon data machine, and scraping a bit of their skin off to verify who they are," Mulcahy said.

Nevada gaming regulator Scherer said he believes those verification measures would deter gamblers in general from participating online.

"I don't think customers are going to let them scan their retina. They're going to say, 'I'm of age, but I'm not going to let you do that. That's an invasion of my privacy,"' Scherer said.