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AGA Board Discusses Internet Gaming Tomorrow

5 December 2000

The board of directors of the American Gaming Association - the voice of the Las Vegas gaming establishment -- meets in Las Vegas tomorrow, and one of the topics on the agenda is Internet gaming.

The organization has long opposed this type of gaming, because of "the lack of regulatory and law enforcement oversight," in the words of Frank Fahrenkopf, the group's executive director. But in recent months, two key members of the AGA have taken steps to prepare for the possibility that online gaming will become clearly legal in the U.S.

In August, MGM Mirage announced that it would establish Web sites for six of its most prominent casinos, with play-for-fun wagering at each site. Those are still in development, but late in October Harrah's Entertainment quietly added a play-for-fun section to its Web site. Casino games there are operating, although they are only available to member of Harrah's slot club program.

Both companies acknowledge that the sites may always remain play-for-free, but both say they want to be ready to "flip a switch" if the legal and regulatory environment for online gaming in the U.S. changes.

With two powerful members prepared to embrace real-money Internet casinos, the AGA's official opposition seems obsolete. And a change in the AGA's stance could have implications for Congressional efforts to explicitly ban the activity, or at least attempt to. The AGA has donated more than $6 million to political parties this year.

A spokeswoman for the AGA did not respond to a request Monday for information about the topic. But a spokesman for Phil Satre, chief executive of Harrah's, told RGT Online today that online gaming is on the agenda for discussion at Wednesday's meeting.

Satre was not aware of any specific proposals for a change in the AGA policy, the spokesman said, adding, "We're not taking a position."

In October, U.S. News & World Report quoted Alan Feldman, spokesman for MGM Mirage, on the subject of the AGA's opposition to online gaming: "The board is acting on a vote from a year and a half ago. This thing is moving at light speed."

Interviewed by RGT Online shortly after that story appeared, Fahrenkopf said the AGA board's opposition actually dates back about four years. He said the subsequent failure of the Kyl/Goodlatte legislation in Congress, along with the moves by MGM Mirage and Harrah's, meant that the board would probably take another look at the subject.

"Clearly they're positioning themselves so that if and when Internet gaming should become clearly legal, they'd be in a position to grab a large piece of the market because of their brand name advantage," Fahrenkopf said then of the plans by MGM Mirage and Harrah's.

He also noted that comments by regulators in Nevada and elsewhere have indicated a change in attitude toward Internet gaming.

Fahrenkopf said the Kyl/Goodlatte legislation had not been "aggressively pursued" by the AGA, but that the organization had let everyone know that it opposed online gaming because of "the regulatory problem."

He didn't think the bills are likely to pass if they are introduced in next year's Congress. But he said he did expect Congressional opponents of online gaming to try again to prohibit the use of credit cards for such purposes.

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