Editorial: Internet gaming still is a bad bet

Friday, Dec. 28, 2001 | 9:17 a.m.

Next week the Las Vegas City Council will debate whether it should get involved with Internet gambling. Under proposed ventures bandied about before, city government would receive money from an Internet gambling operation as long as the website was allowed to use the city's seal and name, something that would give the website instant legitimacy. Last year Las Vegas Mayor Oscar Goodman said the city should become a partner with vegasone.com, but that idea went nowhere when Goodman subsequently had to abstain from voting on the matter because his law firm had represented Bob Stupak, who was involved in the venture.

It was a mistake for the City Council to consider a partnership before and we've seen nothing in the past year that would change our mind. It's still a bad idea that should be rejected by the City Council. For starters, Internet gambling has been found to be illegal in the United States under the federal Wire Act. That interpretation of the law is being challenged in federal courts, but it still is the law. Supporters of a partnership also claim that in any agreement, the city would not be liable if there were any lawsuits filed against the Internet gaming company. But it would be difficult for the city to escape total liability, especially since the city would receive profits from the partnership. For that matter, any scandal involving the website could tarnish the city's reputation.

Even if the legal hurdles could be cleared, there are other reasons why the City Council shouldn't get involved. One of the biggest problems with Internet gambling is that it can't be strictly regulated like brick-and-mortar casinos. For example, people must be at least 21 to gamble in Nevada casinos, but it is difficult to imagine that a similar restriction could be -- or would be -- enforced on the Internet. Besides, as a policy matter, government should regulate gambling, not get into bed with an enterprise that is best left to the private sector.

Supporters of the city's involvement with Internet gambling say that the city could reap a financial bonanza, and Councilman Michael Mack has said some of the money could be directed to education. But past government efforts to earmark money for education has been a bust, creating a shell game of sorts. Sure, a set amount from gambling revenues goes to education, but what government does is then reduce by the same amount of revenues from the general fund that education once received. Education rarely comes up the winner in these schemes.

Rather than devoting its attention to a longshot such as Internet gaming, the City Council should spend its time on more important issues -- such as improving the city residents' quality of life and revitalizing the flagging downtown area. Those are worthy endeavors.