Vegas' deal with gambling site folds
- By Dibya Sarkar
- Nov 29, 2000
An Internet gambling company that wanted to use the city of Las Vegas' name
and seal withdrew its revenue-sharing offer Nov. 15 after the deal became
Jim Jimmerson, an attorney and member of VegasOne.com Inc.'s board of
directors, said using the city's name and seal is a unique way to distinguish
VegasOne.com from the 1,100 Internet gaming sites worldwide. "I think it's
inspired thinking of the board of directors," he said.
For gamblers, the city's name and seal would bring credibility to the
site, he said. A study by the investment firm Bear Stearns and Co. Inc.
reported that gamblers considered a site's authenticity as a factor in using
it, he said.
Although the Internet gaming industry is unregulated, Jimmerson said
the city of Las Vegas would have performed a regulatory or oversight function
for the site, resolving possible disputes by users.
Erik Pappa, a spokesman for the city of Las Vegas, said the city council
questioned whether a government entity could be involved in such a venture.
The council also had reservations about whether the site could prevent juveniles
from gambling, he said.
"What they've told us is they're going to start this Web site without
us and if in the future the city wants to get into this, we can give them
a call," Pappa said. The company is expected to reintroduce the offer to
the city in six months.
He said a couple of public hearings on the issue showed no strong public
sentiment for or against this plan. Three council members, including Mayor
Oscar Goodman, recused themselves from discussions due to perceived conflicts
Nevada law bars state residents from Internet gaming, but federal law
is unclear, Jimmerson said. He said VegasOne.com, which has its headquarters
in Las Vegas, would operate out of Australia. In addition, he said the company
has technology in place to preclude U.S. residents and minors from playing.
The company also promised the city about 5 percent of the gross receipts
and 25 percent of the company's annual net profits, which could reach $1
billion over the next 20 years. The worldwide market could reach $6 billion
by 2003 according to projections, he said.
Jimmerson declined to comment on a similar VegasOne.com partnership
with Atlantic City, N.J.