City Council will consider connection with Internet gaming

Diana Sahagun

Thursday, Dec. 27, 2001 | 9:35 a.m.

The debate over whether the city of Las Vegas should get involved in the unchartered territory of Internet gaming will take center stage after the new year.

On Wednesday, the second day of 2002, the City Council will decide whether it should consider the city's name and official seal being used on an Internet gaming site, in return for a portion of the profits.

The issue surfaced with a proposal by Vegasone.com, but died after the main proponent, Mayor Oscar Goodman, was forced to abstain after learning his law firm had represented Bob Stupak, who was involved in the proposal.

But this time around, Goodman will be allowed to participate because the discussion will be conceptual -- no specific proposal from a company is on the table. His views are likely to clash with other council members who have expressed concerns about whether such a venture would put the city at risk.

The Department of Justice has taken the position that Internet gaming is illegal in the United States under the federal Wire Act, though this position is being challenged in a federal appeals court.

The city, however, has received unsolicited bids from Internet gaming companies seeking to position themselves for the future. They are interested in a licensing agreement that would allow the city's name and seal to be used, according to city reports.

The city manager's office is looking for direction from the council for the future evaluation of proposals, as well as how impending Nevada Gaming Commission regulations may impact the city's actions, according to the reports.

Goodman last week said he would be in favor of the idea, but would insist that the system be foolproof so that no bets are taken from the United States, that the company would monitor the ages of the players, and that there would be a way to determine whether a player has a compulsive gambling problem.

Goodman could find support from Councilmen Michael Mack and Michael McDonald, who were initially supportive of the idea but had to abstain because of conflicts of interest. But Councilwoman Lynette Boggs McDonald has expressed continued concern over the city's potential liability.

The 2001 Legislature acknowledged that online gaming is on the horizon, and in June passed Assembly Bill 466, which allows Nevada regulators to establish rules for casinos in launching interactive gaming. The Gaming Commission estimates Nevada is at least two years from legalizing Internet gaming, in part because of federal wiretap laws.

If the city had granted its name to the Australia-based Vegasone.com, Las Vegas would have received 25 percent of the company's profits. If the city had served in a regulatory capacity, it would have received 5 percent of the gross gaming revenues.

Mack, a self-proclaimed "techie," said he is intrigued at the idea but insists there must be a partnership with the state Gaming Control Board and the Nevada Gaming Commission. He also suggested partnering with other agencies, such as the Las Vegas Convention and Visitors Authority, so the entire valley could benefit.

"If it's billions of dollars, why not share it with the whole valley?" Mack said. "Let's help the Clark County School District, and bring it up to a whole new level."

Sun reporter David Strow contributed to this story.