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California and the West

Internet Betting Plan Is Off the Vegas Table

Deal: Firm withdraws its offer for computer gambling site. City invites to return after it has a solid track record.


LAS VEGAS — A company that promised City Hall more than a billion dollars to join its Internet gambling venture withdrew the offer on Wednesday, citing a lack of political support. But its leaders promised to be back.

The City Council--with three of its seven members abstaining because of conflicts of interest--invited the company,, to revisit the idea in six months.

In the meantime, the company will launch a gambling Internet site from Australia on its own. It hopes to prove to city officials that computer gambling--currently considered illegal, though popular, in the United States--can be operated legally by screening out underage and U.S. gamblers.

Jim Jimmerson, an attorney for, said the company does not want to press the city for a partnership until council support for the proposal is unanimous.

He said he believed city officials are hesitant because Nevada state law specifically bans Internet gambling and City Hall doesn't want to flout the law--even if the Internet site is based in Australia, where it is legal.

In time, he conjectured, Internet gambling will be legalized in Nevada and throughout the nation and city officials will feel more comfortable participating in the commercial venture.

City Council members, however, also have questioned the propriety of supporting a cyberspace casino that would compete with similar sites that casinos in Las Vegas may launch. Executives from several large casinos have pressed hard for the city to reject the plan because, among other reasons, the partnership between and City Hall would compete with their own Internet gambling plans.

The company wants to use the city seal--and have the city regulate the site--to give it special credibility in the burgeoning and mostly unregulated Internet gambling industry.

In exchange for its licensing and regulatory role, the city would receive a share of profits projected to exceed $100 million a year for a 20-year contract.

Two members of the City Council, which has been considering the proposal for two months, encouraged the company to come back with the idea, after it can establish a successful track record.

"This doesn't close the door on a future possible relationship," said Councilman Larry Brown.

The novel idea of City Hall's co-sponsoring an Internet wagering site was shepherded by Mayor Oscar Goodman, who later had to withdraw as its cheerleader because his law firm had represented one of the people who inspired the idea. Since then, two other council members also have withdrawn from the discussions because of similar conflicts.

Principals in the company include the former chairman of the state gaming control board, the founder of a slot machine manufacturer and the former presidents of MGM Grand and Caesars Palace.

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