Internet gamblers are quick to question the fairness of Web-based casino games when they encounter technical glitches that make the games stall or fail, industry observers say. In fact, the industry will have trouble appealing to the mainstream public until such problems are resolved, observers agree.
“The biggest question about these sites from a player’s point-of-view is: Does the game offer the player a fighting chance to win?” said Tam Lee, an Internet gambling expert who reviews e-casinos for rgtonline.com.
Lee said a player’s suspicion of a rigged game arises when an online blackjack player is dealt a pair of cards totaling 11, and increases his or her bet, anticipating that the next card dealt will be a 10 or a face card. And then a technical glitch locks up the game. “It scares you when the game stalls at that point, and then you wind up with a two,” Lee said. “It’s not likely (the game’s operators) are changing the cards, but it raises questions to the players.”
The Internet gambling industry is expected to grow from Pragmatic Play revenues of about $1.5 billion in 2000 to $6 billion by 2003, according to the New York investment banking firm Bear, Stearns & Co. More than 800 Internet gambling sites exist, most of which are developed by about a dozen software companies, according to gamemasterlist.com. Tony Cabot, an Internet gambling lawyer for the Las Vegas-based law firm of Lionel Sawyer & Collins, said four software makers have a strong hold on the market: Starnet of Vancouver, Canada; Microgaming of South Africa; CryptoLogic of Toronto; and Boss Media of Sweden.
Games developed by the software industry leaders typically promise a smaller chance of winning than their smaller competitors, but are likely fairer than games provided by the smaller operators, Lee said. “CryptoLogic offers about a 98 percent return on video poker and blackjack, but of course, the rules are such that the casino’s odds may be a bit higher due to player mistakes,” Lee said. “If you want better odds than what the major software-makers offer, you have to venture a bit off the beaten path, but if you do that you risk security.”
Most software-makers charge an Internet casino between $10,000 and $250,000 to develop a Web-based casino, with software companies receiving as much as 30 percent of the gaming win generated by the site, Lee said.
Canadian and U.S. laws prohibit most forms of Internet gambling from within their borders, so most Internet casinos are based on offshore islands, where regulations tend to be lax or non-existent. Some industry observers say if Internet gambling were allowed in extensively regulated environments, such as Nevada or New Jersey, the largest U.S. casino operators would have a major edge in seizing control of online gambling. “If Harrah’s Entertainment or Trump or (Park Place Entertainment) go online, they will become the 800-pound gorilla,” Lee said.
Harrah’s offers casino-style games for prizes on its harrahs.com site, developed by software-maker Chartwell Technology of Calgary, Canada. Harrah’s also has a strategic alliance with iwin.com, aimed at channeling Web traffic to each other’s site. Analysts say games-for-prizes Web sites are one step from being converted to games-for-cash sites, if and when U.S. gaming regulators permit the practice. A federal proposal to ban the practice is expected to once again be introduced in the House and Senate, where prior proposals have languished.
In Nevada, Assemblywoman Merle Berman, R-Las Vegas, plans to introduce a bill during the state’s current legislative session that would legalize Internet gambling within Nevada’s borders. New Jersey legislators are debating a similar proposal to allow companies with Atlantic City gaming licenses to operate Internet casinos.
Berman did not return a Thursday phone message left at her legislative office. Nevada Gaming Commission chairman Brian Sandoval said he has viewed a draft of her bill. “It’s a broad-based bill that leaves the policy decision of legalizing Internet gambling to the Legislature, and the security issues to the Gaming Commission and the (Gaming Control) Board,” he said. Sandoval noted that Nevada regulators need to be convinced that lnternet casinos seeking to operate in the Silver State can prevent gambling by minors and people living in jurisdictions where e-gaming is not permitted.
But some industry observers doubt a continued prohibition of Internet gamblers in the United States will slow growth of the industry. “Starnet has jurisdictional blocking software, which doesn’t accept Internet gamblers in Canada, but the vast majority of the software makers don’t care (about regional prohibitions),” Lee said. “I don’t think that’s going to change.”