INTERNET GAMBLING: City will discuss Net Togel venture


The city of Las Vegas could enter the dot-com world of gambling via an idea that was recently pitched to Mayor Oscar Goodman, who has pushed for a discussion of the proposal at today’s City Council meeting.

Proponents of the plan that would see city government ally itself with an Australian-based Internet gambling Web site argue that the city must take control of the lucrative Las Vegas name, a possibility that Goodman sees as extremely attractive.

“I’m the kind of mayor who wants to explore every conceivable way for the city to generate revenues so we can provide services to our constituents,” he said Tuesday. “I’m certainly willing, able and anxious to discuss it.”

Critics question whether a government entity should be so closely tied to the gambling business, potentially competing with the private sector while possibly facing legal troubles should anything go awry.

“I don’t think it makes sense in terms of good public policy,” said Sen. Richard Bryan, D-Nev. “My view is Internet gambling is not good for us in Nevada or in the country generally.

“I don’t think being able to gamble from the family room where you don’t know (whether minors are) coming online is a good thing for society.”

The proposal would see public officials license the city’s name and official seal with Inc., a fledgling Internet business.

Key players in the group that pitched the idea to Goodman include former MGM Grand boss Larry Woolf, ex-Caesars Palace boss Dan Reichartz, one-time Nevada Gaming Control Board Chairman Phil Hannifin and internationally known gaming lawyer Tony Cabot.

In return for its official name and seal, the city would receive a percentage of the revenue generated by the site, which executives believe could be as much as $1.2 billion in 2003, or about 20 percent of the projected $6 billion expected to be earned by Internet gambling sites in two years.

The city would use a portion of its take to hire a regulatory body that would oversee the operation to ensure the games’ integrity.

“The goal is to be the first highly regulated Internet gaming site using the name Las Vegas and hopefully capture 20 percent of the market out there,” said a knowledgeable source who requested anonymity.

At this point, it’s unclear how the city’s name would be tied to the Web site, the source said.

Woolf and Cabot were unavailable Tuesday to discuss the proposal, which cannot be voted on at today’s meeting.

The U.S. Justice Department believes that federal law currently bans Internet gambling within the United States, so only foreign gamblers would be able to place actual bets on the site.

Gamblers from within U.S. borders would be able to place not-for-money bets on the site, possibly receiving free rooms at Las Vegas hotels for winning wagers.

The knowledgeable source said the site has the potential to generate more Togel revenue than the billion-dollar-a-year Las Vegas locals market.

“Your profitability could be huge,” he said. “You have to spend a few years branding this. You’re not going to take money to the bottom line right away.”

Key figures on Nevada’s political and gaming regulatory scenes said Tuesday they knew little of the proposal but many questions immediately popped to mind.

For example:

–Can the city create its own regulatory body?

–Would the city be liable for any fraudulent acts committed on the site?

–Would the city be liable for the losses of minors who illegally accessed the site?

–Has technology advanced far enough to keep hackers from stealing the credit card numbers of online gamblers?

–Could fraudulent acts on the site taint the reputations of the city, the state of Nevada and its casinos?

“I’ve had some briefings from the city attorney and the city manager, but I think there are a lot of questions that all of the members of the City Council will have,” said Councilwoman Lynette Boggs McDonald.

Word of the proposal began to circulate several weeks ago, but Bryan and two of Nevada’s top casino industry regulators said Tuesday they knew little of the Internet gambling plan and were troubled by some aspects of the plan.

“Yeah, I’d be concerned about that because it’s an activity that’s illegal in Nevada,” said Nevada Gaming Control Board member Dennis Neilander.

A 2-year-old state law forbids Internet gambling within Nevada’s borders.



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