Playboy Enterprises Inc., Microsoft Corp. and Viacom Inc. have already placed their bets on Internet gambling beating out established gambling giants like Park Place Entertainment and Harrah’s Entertainment .
Those companies have already established virtual casinos outside the U.S., where Internet gambling isn’t prohibited.
That means Las Vegas-based casino corporations have a tight window to get in on the game before losing out to more nongambling companies, industry experts said Thursday at the first Interactive Gaming Exposition and Conference.
“Internet gambling is inevitable. It’s here. If you think time is on your side, it’s not,” said Sebastian Sinclair, gambling industry analyst and vice president of Christensen Capitol Advisors. “The next 12 months are it. If you don’t, other companies will come to dominate this market.”
Lawmakers in June approved a bill enabling Nevada to become the first state in the nation to offer Internet gambling. Federal law currently bars Internet gambling, but state officials say court challenges could change the federal government’s position.
Casino executives are meeting with technology developers of proposed online casinos, Nevada gambling regulators and Wall Street analysts to discuss the future of Internet gambling. The conference at the Bellagio hotel-casino ends Friday.
Playboy Enterprises Chairwoman and Chief Executive Christie Hefner said Playboy Online, a subsidiary of Playboy Enterprises, is part-owner of a number of online wagering businesses that she said have caught on quickly with Playboy’s 4.4 million monthly Web site visitors.
“Creating a new focus of where entertainment and gaming meet is very exciting,” she said.
The tourism slump stemming from this month’s terrorist attacks on America is giving the gambling industry fresh incentive to look to the Internet as a way to attract business through established brand names like Caesars Palace and Harrah’s.
“The Internet can be used to expand the storefront, rather than replace it,” said Marc Falcone, a gambling analyst for Bear Stearns Co., a Wall Street investment firm that is co-sponsoring the conference.
Sinclair said a recent survey shows 30% of all adults best online casino singapore online and they lose an average of $960 a year compared to land-based gamblers who spend $511 annually at brick-and-mortar casinos and on lotteries.
Analysts praised MGM Mirage, the largest owner of Las Vegas Strip properties, for taking the lead and being the first major gambling company to obtain an offshore gaming license on the Isle of Man, an island-nation off the coast of Great Britain that is establishing regulations for the industry.
MGM Mirage spokesman Alan Feldman said it will probably be a year before the regulatory structure is established and sites are operational.
“Terry Lanni [MGM Mirage chief executive] is going to eat everyone’s lunch,” Mr. Sinclair said.
But Nevada regulators and lawmakers said they were disappointed in the gambling giant’s move.
“MGM, obviously as a business, is free to do that as long as they can operate legally and in compliance [with Nevada gaming regulations],” said Scott Scherer, a member of the Nevada Gaming Control Board. “But I wish they would have kept their business here.”
Mr. Scherer warned casino operators that their companies risk losing their gaming licenses for their land-based casinos in Nevada if violations are found in an offshore operation.
The conference, sponsored by the nonprofit Interactive Gaming Institute of Nevada and Bear Stearns, came when hotel occupancy rates — normally around 95% on Fridays and Saturdays — were about 75% last weekend.
Another hurdle to the legalization of Internet gambling is preventing minors and those in jurisdictions that prohibit gambling from logging on to a virtual casino.
“At the end of the day, we will solve the technical issue, the problem will be the political issue,” said Anthony Cabot, Internet gambling legal expert and conference chairman.
Experts estimate revenues from Internet gambling — largely conducted by offshore companies because of the U.S. ban — reached $2.2 billion last year and could total $10.5 billion by 2005.
Industry analysts attributed the growth of Internet gambling to a rise in the number of online households, increased consumer confidence and improved software technology.
“In the future, e-gambling will become mainstream,” Mr. Sinclair said.