Vegas Execs Assess the 'Newest Threat' to Communications

Dan Wade, the CEO for MGM Mirage, and Tom Gallagher, the CEO for Park Place Entertainment which has Caesars Palace among its land-based operations, both spoke to the commission about issues facing the body as it prepares to regulate Internet gambling.

Gallagher spoke the longer of the two, and despite published reports out of Nevada, made it clear that his company is exploring using its popular global brand on the Internet, but is no where close from opening up an online casino.

"There will probably come a time when gaming on the Internet will be common and legal in vast parts of the world, when available technology and regulatory scrutiny will be sufficient to establish the same social consensus that is the foundation of the gaming industry in this country and in many foreign jurisdictions." - Tom Gallagher Park Place Entertainment

In his remarks Gallagher said that a thorough process would be conducted before the company puts its land-based operations at risk. The fact that there's maybe a market demand for Vegas-based online casinos doesn't mean that Park Place will take that step, according to Gallagher.

"Internet gambling deals with a great number of issues," he said. "The demand for the service is just the beginning of the analysis. There is a demand for a lot of businesses that currently aren't legal."

Gallagher compared the Internet gambling trend to that of the land-based craze, in which he said there are plenty of people who can enjoy a visit to a casino without getting themselves into financial or psychological problems. But unlike a traditional bricks-and-mortar casino facility, an online casino has much more limitations on what it can offer.

"It's focused solely on gaming and is not part of a broader entertainment experience," he said. "There are no theatres, shops and other diversions at an online casino that you have at a land-based one."

Online gaming lends itself to more solitary gaming with players playing at home rather than being a social function like a land-based operation, according to Gallagher. He also feels gambling addiction is a bigger issue in the online arena than at traditional casinos.

"The ability to restrict compulsive and underage gaming on the Internet is far from clear," he said.

In due time though, Gallagher feels all-important issues can be addressed.

"There will probably come a time when gaming on the Internet will be common and legal in vast parts of the world," he said, "when available technology and regulatory scrutiny will be sufficient to establish the same social consensus that is the foundation of the gaming industry in this country and in many foreign jurisdictions."

But until that time comes, don't expect to playing craps at ceaserspalace.com, according to Gallagher.

"When and where that occurs, Park Place expects to compete strongly in those markets just as we do in all of our other markets," he said. "We should pause for a moment before deciding to legitimize and legalize Internet gaming for U.S. citizens."

It is more than just a U.S. issue for Park Place and MGM, and most of the Vegas-strip properties today that are part of international entertainment and hotel chains.

Gallagher said most companies share the same ideology as his that no resources will be committed to an online casino until all gray area has been cleared up.

"There must be no legal issues for us before we go online," he said. "We shouldn't go to any jurisdiction where we aren't wanted and we shouldn't enter homes uninvited."

Gallagher did hint that his company is looking into getting an Internet gambling license in the Isle of Man.

"It's something that we are considering," he said. "It's not a primary focus because it's simply one element of a much broader picture."

"Welcome to the newest threat to communications. It is called the Internet." - Dan Wade MGM Mirage

Wade also said his company is looking into of brining a popular global brand to the Internet, but there are no immediate plans for an online casino. He was far less cautionary in his comments though.

"There have always been communication threats throughout our history," he said. "Newspapers were threatened by radios and radios were later threatened by televisions. Each time the older element was convinced the new medium would ruin society as we knew it. State's rights were an issue even way back then. Welcome to the newest threat to communications. It is called the Internet."

Wade did suggest to the commission that its task not be taken lightly, but also consider the global trend.

"You must approach this cautiously," he said. "The Internet is here to stay, whether we like it or not."

Both Gallagher and Wade agreed that if their companies are given the green light to operate an online casino, they will do it, but both agree the process needs to be done right.

"Let's not rush to make it easy for our kids to place game on our home that we don't want them playing in our casinos," Gallagher said. "We will have to be a lot more comfortable from a technological standpoint than where we are now."

Wade borrowed a phrase from Bill Bible, the chairman of the Nevada Resort Association, in suggesting to the commission what type of approach should be taken in setting up new standards.

"We need to regulate people on the Internet," he said. "Not the Internet itself."