Casinos Hedge Their Bets - online gaming - Industry Trend or Event

Industry Standard, The, June 18, 2001 by Susan Orenstein

The real significance of last week's Internet gambling breakthrough -- Nevada legislators passed a law paving the way for online gaming -- went almost unremarked. It wasn't so much that Internet wagering might be permitted for the first time in the United States. After all, with the legal complications surrounding the new law, the practical effects might not be realized for years. The true impact lay elsewhere -- in the emerging shift in attitude of the casino industry.

U.S. casino operators, who control $22 billion in legalized gambling, once strongly opposed betting on the Internet. They didn't want to be associated with the offshore interests that run about $1.4 billion in Web-based betting. And they didn't want to alienate government regulators, with whom they must coexist.

But the potential of online gambling was too big to ignore. Bear Stearns projections peg online gambling as a $5 billion business by 2003. Industry experts estimate that 60 percent to 90 percent of that business now comes from the United States. "There's a growing recognition that Internet gambling is becoming more popular," says Gary Thompson, a spokesman for Harrah's, which has moved only so far as having a "neutral" position on the matter. Another important voice in the gambling lobby, MGM Mirage's chairman J. Terrance Lani, recently declared his position against online gaming has shifted "180 percent."

Not everyone in the gambling industry is ready to wager on the Internet. The board of the American Gaming Association, for example, voted in May (after a "lengthy discussion") to continue opposing online betting. But you can bet Internet gambling will pay off eventually.