Online gambling ad spots may have targeted Nevadans

By Liz Benston (contact)

Wednesday, June 26, 2002 | 11:09 a.m.

The state Gaming Control board is considering asking the state Attorney General's Office to investigate and crack down on advertising campaigns by online gambling sites that target Nevadans, board member Scott Scherer told an Internet gambling conference Tuesday.

Scherer's keynote speech opened the iGamingWorld conference that continues today at the Bellagio hotel-casino. The conference is a new venture for promoter Boston Media Corp., a marketing company serving the online gambling industry.

Radio ads for a sports betting site that aired in the Reno area prompted the board's concern, Scherer said. He did not name the site but said it had aired on KOH, an AM talk radio station in Reno.

The venue, in a market less dominated by tourism than Las Vegas, indicates the spots may have been targeting locals rather than non-U.S. citizens who can how legally bet online, he said.

The Nevada Legislature last year approved a bill authorizing the state to craft online gambling regulations. Online wagering still hasn't been expressly legalized, however, largely due to confusion about applicable federal laws and the difficulty in applying existing state law to online casinos.

The legislation requires regulators to obtain "reasonable assurance" from Internet operators that their casinos could screen out gamblers who are underage or from states where gambling is illegal, according to the legislation. At recent hearings on the matter, state regulators have concluded that such technology likely exists but could be cost-prohibitive to implement.

A spokesman for the Attorney General was not immediately able to confirm that any discussions had taken place.

Two of the three Gaming Control board members would need to approve of the investigation for the Attorney General to move forward, Scherer said.

Despite a multitude of regulatory, financial and marketing hurdles facing online operators, Internet gambling in the United States is "inevitable," he said.

"I think the public is hungry for regulated Internet gaming."

Still, the fact that major U.S. credit cards have halted online wagering transactions "could be one of the most significant issues" operators must tackle in the near term, he said.

Another major stumbling block is interpreting the federal Wire Act, a vaguely written law banning sports wagers over interstate phone lines that the Department of Justice has in the past applied to Internet wagers, he said.

Gaming Control Board chief Dennis Neilander and Nevada Gaming Commission Chairman Peter Bernhard have requested meetings with DOJ officials to obtain a clarification of the act, a move that doesn't appear to be a priority at present under the new administration, he added.

Also, the issue of problem gambling has gained momentum after recent comments made by former Massachusetts Attorney General Scott Harshbarger that casinos will soon face a gauntlet of lawsuits from addicted gamblers.

Anti-gambling advocate Tom Grey has said the casino industry will be sued in a fashion similar to the crippling lawsuits brought against tobacco companies by addicted smokers.

People are wrong to compare the casino industry with the tobacco industry, which makes a product that harms anyone who uses it, Scherer told the crowd.

Still, he said, "it is incumbent upon the industry to show they are not targeting problem gamblers."

"The momentum is in favor of public and political acceptance" of Internet gambling. Yet one wrong move and a federal Internet gambling ban could quickly come to pass, as could a backlash that could set the industry back several years, he said.