e-gambling Togel Hongkong could get trial run
A proposed Internet gambling site with ties to the city of the Las Vegas could have a three-month trial period.
Mayor Oscar Goodman proposed the test run during a Monday City Council meeting to consider whether such a site should operate with the city’s official name and seal.
Las Vegas lawyer James Jimmerson, who represents a group of longtime casino executives pushing the plan, said he was unsure whether his clients would approve a trial period.
“My suspicion is that they would support it,” Jimmerson said following the afternoon meeting, “but I don’t want to overstep my bounds.”
City officials are considering the proposal by vegasone.com to lend Las Vegas’ official seal to the site, as part of a money-making effort to raise millions of dollars for city programs.
Las Vegas casino industry lawyer Tony Cabot, who represents developers of the proposed site, said the Web address could conservatively generate $360 million a year, with $90 million going to the city of Las Vegas.
Last spring, the City Council approved a $321 million budget for the current fiscal year.
According to the terms of their proposed licensing agreement with the city, the group of Las Vegas-based executives would use the city of Las Vegas name and official seal on their vegasone.com Web site in exchange for 5 percent of the site’s gross revenues and 25 percent of its profits.
Company executives believe the seal would give their site a competitive edge with skeptical online gamblers who are wary of many of the estimated 1,000 Internet betting sites.
City Councilman Larry Brown questioned Monday if the city should join with a private company in a business venture.
“Where do we draw the line between partnering with a company and overseeing it? What is our role as a government agency?” Brown said. “I’m interested in moving forward with this, but we need to move forward incrementally. I’d like to see more public dialogue of what we are contemplating.”
The company’s board of directors includes Jimmerson; former Caesars Palace boss Dan Reichartz; ex-MGM Grand boss Larry Woolf; former Nevada Gaming Control Board Chairman Phil Hannifin; International Game Technology founder Si Redd; and USA Capital’s Tom Hantges. Hannifin is vegasone.com’s chairman, and Redd is the vice chairman.
Jimmerson said USA Capital’s Hantges has committed $20 million toward the venture.
Citing figures from the Wall Street Investment banking firm of Bear, Stearns & Co., Cabot predicted that Internet gambling will generate $6.3 billion in yearly revenues by 2003.
“If 50 percent of those Togel Hongkong bets are being made by the U.S., and we garner just 10 percent, that’s $360 million,” Cabot said.
Jimmerson said he will tell the council Wednesday whether his client’s will agree to the proposed trial period, although board member Woolf said Monday evening it was too early to say if he’d support such a move.
“We would be willing to look at the issue very closely, but I can’t give an answer since I wasn’t at the (City Council) meeting and am not aware of the context in which it was given,” Woolf said.
Jimmerson said he doesn’t see any reason why his fellow board members would not accept a practice run.
“They may ask for a longer trial period, like a year,” he said, “but I’m sure they are willing to work with the city.”
The City Council would have to vote to determine whether the city’s seal could be placed on the site.
Ten people testified at Monday’s public hearing, with several wondering whether the city would be held liable if minors and others accessing the site from within U.S. borders were caught gambling.
Lawyers at the U.S. Justice Department believe federal law prohibits Internet gambling within U.S. borders, and legislation supported by Sen. Richard Bryan, D-Nev, is working its way through the House and Senate to clearly ban Internet gambling within the United States.
Jimmerson said numerous fire walls or security checks would be taken to prevent illegal betting and a city-appointed board could define acceptable advertising for the site.
He noted that vegasone.com would be licensed and regulated in Australia to avoid Nevada’s prohibition against Internet gambling. Its Web server would be based overseas, possibly in Australia or Europe.
Council members as well as some residents raised concerns of an online gambling site with the Las Vegas seal possibly harming the city’s reputation if the site conducted itself in an unethical manner, such as accepting X-rated advertisements.
“I think anything of this magnitude should go to the vote of the people,” resident Richard Bratton said. “This is very very risky.”