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Nevada online company might open door to Internet gambling

LAS VEGAS (AP) – Playing games in cyberspace for cash prizes could speed the expansion and legalization of Internet gambling in the United States, industry experts say.

Earlier this month, the Minden, Nev.-based WebQuest International Inc. launched OnlineChess.com – the first website to let chess players compete against each other for prizes in cyberspace. For a $25 entry fee, chess players can bet from $2 to $25 per match.

Another website WorldWinner.com allows people to play others in cyberspace while betting on their own skill. Participants pay 60 cents to more than $9 to enter tournaments to compete in such games as solitaire or to solve jigsaw and crossword puzzles.



”The outcome of every game is in the hands of the player,” said Zorik Gordon, president of WorldWinner, which awards more than $15,000 a day from more than 5,000 completed tournaments.

Nevada Gaming Control Board Chairman Dennis Neilander says WebQuest and WorldWinner are walking a fine line.



The Gaming Control Board, which is responsible for the state’s day-to-day gambling regulation and enforcement, continually monitors Internet website offerings, Neilander

”We look into these things all the time,” he said. ”People are really pushing the envelope because they see so much upside into these kinds of activities.”

Online gambling, while not specifically banned by law, is considered by the U.S. Justice Department to be a violation of the Interstate Wire Act, a 1961 law banning gambling by telephone.

But operators of OnlineChess say they are offering one the first legal alternatives to online gambling for U.S. Internet users.

”There are no federal gaming laws that would disallow this,” said Scott Berry, chief financial officer for WebQuest.

Internet gambling expert and Las Vegas attorney Tony Cabot agrees.

”This isn’t gambling,” he said. ”It’s pure skill.”

Cabot, a consultant for WebQuest, said he surveyed each of the 50 states and discovered that at least 33 and the District of Columbia allow residents to risk money on games of skill, whether it be a golf or Monopoly tournament.

”In some states you can’t and in some you can,” Cabot said.

States prohibited from playing for money online are: Arizona, Arkansas, California, Delaware, Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont and Wyoming.

Gambling by legal definition is comprised of a ”prize, consideration and chance,” Cabot said. ”Skill games don’t follow the same rules as casinos.”

Bill Thompson, a gambling industry expert and professor at UNLV, said there are elements of luck in the cyber games, but it is minimal.

”In this case the government would be hard pressed to call it gambling,” he said.

Indeed, some in government are ready to ignore the distinction.

Nevada does not permit cyber-gambling within its borders, but state legislators are debating whether to permit some forms of Internet gambling.

In New Jersey, two lawmakers want their state’s casinos to get in on the cyberspace game. Legislation is pending that would permit licensed casinos there to offer the same games online that it offers in its casino.

Nevada Gaming Commission Chairman Brian Sandoval said the legalization of Internet gambling is inevitable, but state regulators should wait to approve it until software is advanced enough to block minors and problem gamblers.

”I have always believed that (Internet gaming) is part of the evolution of gaming, as long as we can regulate it properly,” he said.

The Nevada Resort Association, which represents many of the state’s casinos, originally opposed efforts to legalize online gaming, saying it could siphon business away from brick-and-mortar casinos.

That attitude, however, is changing.

”If it (Internet gambling) is clearly a legal act, I think it’s appropriate that Nevada licensees engage in it,” said Bill Bible, association president and former state gaming regulator. ”Gambling is certainly one of the mainstays of our economy, and if licensees in other jurisdictions can do it, then it certainly makes sense that Nevada licensees should be involved in it.”

At least three Las Vegas gaming companies – Park Place Entertainment, MGM Mirage and Harrah’s – have invested in technology firms developing equipment for secure Internet games. All three companies offer non-cash casino games on their Internet sites.

”We think it makes sense,” said Alan Feldman, spokesman for casino giant MGM Mirage, the largest operator of hotel-casinos on the Las Vegas Strip.

Despite the U.S. ban, estimated revenues from Internet gambling reached $1.5 billion last year and could reach $6 billion by 2003.

A proposed federal law specifically banning Internet gambling failed in Congress last year. Cabot said it isn’t clear if a new version of the legislation sponsored by Sen. Jon Kyl, R-Ariz., will be introduced.

However, Cabot thinks the federal Wire Act only blocks sports betting over the Internet, not casino games. Some believe skill-based gambling for real money is the next step.

”It does open the door a little bit because next they will go to card games like blackjack,” he said. ”All games have a mix of skill and luck. Chess is overwhelmingly skill, while solitaire is leaning toward luck.”

WebQuest spokesman Chet Chicosky said the industry is in for dramatic changes.

”They are kicking the door in on Internet gambling.”

On the Net:

http://www.OnlineChess.com

http://www.webquestinc.com

http://www.WorldWinner.com

AP-WS-03-28-01 1941EST


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