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Saturday, 30 November, 2002, 08:14 GMT
Vegas casinos bet on the net
Street scene in Las Vegas
Bright lights of Vegas coming to the net
The famous casinos of Las Vegas are looking into extending their gambling empire into the online world, as BBC World ClickOnline's Richard Taylor found out.
Las Vegas is a city consumed by gambling. Behind the glittery facade of its casinos there are dozens of ways in which this obsession in played out.

Over the years technology has played a role in making the offerings ever more inventive.

Yet until recently the entertainment corporations which run the Vegas casinos had been reluctant to embrace the clicks-and-mortar world of internet gaming.

"Many operators here aren't used to the challenges of being an online company," said Anthony Cabot, a lawyer specialising in gambling legislation.

"The second major challenge is obviously legal. Unfortunately the position of the Department of Justice is that all gambling by US companies from the US is illegal."

Identifying players

One of the largest entertainment groups in Las Vegas, MGM Mirage, has thrown down a challenge to its rivals and the regulators.

It already owns some of the most prestigious properties in the city. Fed up of watching online gambling grow from the sidelines, the group decided to launch its own cyber-casino outside of US legal jurisdiction.

Las Vegas casino
US has strict laws on gambling
Two years of careful planning gave way to celebration two months ago, when the online venture finally launched offshore just off the British mainland on the Isle of Man.

The site offers a variety of different games, which you can play purely for fun.

Paid betting is only offered to citizens of six European countries.

To keep Americans out, MGM has built a system that uses technology to monitor where players are betting from.

"We are 99.9% confident it catches anybody who's not of age or from places that don't currently allow online gaming for its citizens or operators," said Bill Hornbuckle of MGM Mirage Online.

MGM say their geographical verification software can identify where customers are coming from and prevent them from using the site.

Cautious casinos

Despite its confidence, the fact is that MGM is taking a risk worthy of a Vegas high-roller in deciding to launch an online casino.

Las Vegas welcome sign
You do not have to travel to Vegas to gamble
If the bet pays off, they will grab a share of a $3.5bn gaming industry. If it fails, the group risks its reputation and perhaps its long-term future.

With such high stakes, many of its Vegas rivals are cautious about following suit.

"We're watching it pretty closely, but we're being very, very careful at this point and there's a reason why," said David Strow of Harrah's Entertainment.

"We've spent the last 65 years building up this company. We now have more than 24 casinos across the country, and billions of dollars invested.

"But the way it works in the US is that each of these casinos has to be licensed by a state in order to operate. They view it as a privilege not a right.

"If we're found in violation of federal or state laws regarding internet gaming they have the right to take our licences. In essence we could lose our ability to operate our properties," he said.

For these reasons Harrah's is wary of investing millions in online gambling until a whole range of technical, legal and regulatory issues are resolved.

Brand recognition

As far as MGM are concerned, it is aware of how much is riding on its online initiative.

"Clearly everyone's reputations are at stake, and most notably ours because we've taken the first step," said Mr Hornbuckle.

"But we believe it takes a leadership role. We think we've now identified that and we think it can reasonably be done."

Other casinos are now looking into the opportunities offered by the internet.

Two of MGM Mirage's real world competitors have filed applications for an online licence and more could follow.

"The casino industry has a huge advantage in this marketplace because they have great brand recognition, they have databases, and they're building a cross-market for their online product with their casino product," explained Mr Cabot, "so I think a number of them will be involved."

See also:

06 Oct 02 | Business
11 Apr 02 | Science/Nature
17 Mar 02 | Health
25 Feb 02 | Business
05 Jun 01 | Americas
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