Firm vows to sell Internet unit

Friday, March 21, 2003 | 11:19 a.m.

A Las Vegas manufacturer of sports wagering systems promised state gaming regulators Thursday that it will divest of its Internet gambling unit by April 3.

American Wagering was ordered more than two years ago by the Nevada Gaming Control Board to divest of MegaSports -- an Australian subsidiary that operated a sports betting site from that country -- after a 1999 sting operation revealed that the site had accepted a bet from a board agent in Nevada posing as a gambler outside the United States.

The federal government has said that Internet gambling is illegal, leading Nevada regulators to take a closer look at Nevada gaming companies that may have ties to the Internet gambling industry. Regulators are concerned that the state's reputation may suffer if federal action is taken against an illegal betting operation with a link to a Nevada company.

American Wagering was fined $10,000 by the Gaming Control Board in 2000 for the violation -- becoming Nevada's first disciplinary case involving Internet gambling.

The company, which has already been granted extensions on a deadline to sell the unit, was given a final deadline of Thursday. The publicity and regulatory uncertainties concerning Internet gambling have made it difficult to find a buyer, company officials say.

Jeffrey Silver, an attorney for American Wagering, told the Nevada Gaming Commission Thursday that the company's board of directors passed a resolution to sell the unit by April 3 as sign of "good faith."

The company's gaming license could be in jeopardy if it does not keep that promise, commissioners warned.