Internet Gambling Leaders Address Changes Facing the Industry at GIGSE

MONTREAL, QC - Lawrence Lessig opened the eighth annual Global Interactive Gaming Summit and Expo (GIGSE) last week with an appeal to the Internet gambling industry to convince government officials to regulate online gaming. According to Lessig, the industry will not survive in its current form without regulation.

Lessig, a professor at Stanford Law School and the author of two books on the destruction of the original promise of the Internet, opened a dialogue that ran the course of the three-day conference.

The issue is pressing for the industry, especially as three separate bills to make Internet gambling illegal have been proposed in the United States Congress. Several states have already passed legislation that makes it a crime for an individual to place a bet online, with Washington passing a law earlier this month that will go into effect on June 7.

Warwick Bartlett, the lead partner of Global Betting & Gaming Consultants (GBGC), agreed with Lessig's premise, saying that the will of the people affects politics, which in turn determines the law of the land.

"The only time government will change is when the public decries the law," Bartlett said.

Bartlett pointed to the 18th and 21st amendments to the U.S. Constitution, the first of which was enacted thanks to an active minority that created a political climate that favored the prohibition of alcohol. The latter amendment reversed that law, which was widely unpopular, generally ignored, and created more problems than it solved.

In a recent poll conducted by ICR, an independent company that specializes in opinion polling, 74.2 percent of Americans do not believe the federal government should prevent Americans from playing poker online. Some U.S. politicians, however, appear to be listening to the vocal minority and have a negative perception of the online gambling industry. To sway political opinion in the opposite direction, that perception needs to be addressed.

Bryan Bailey, the owner and operator of the online casino player advocacy Web site Casinomeister.com, believes that some in the industry fuel the problem with their marketing strategies. GoldenPalace.com, for instance, has generated headlines using a multitude of strategies, such as paying streakers at major athletic events, buying William Shatner's kidney stone on eBay for $25,000, and even paying a New Jersey couple $15,000 to name their baby "GoldenPalaceDotCom Silverman."

"I thought the eBay stuff was funny," Bailey said. "But it starts getting to be a bit too much. I drew the line when they started naming babies."

Bailey believes that the negative perception created by some of the events, such as streaking the Olympics, may spread one company's name but do harm to the whole industry in the end. He prefers the approach of 32Red.com, which has taken a mainstream marketing approach by placing advertisements on taxicabs in London.

GoldenPalace.com's tactics got the company plenty of attention at a time when the Department of Justice was announcing settlements with media outlets that accepted advertisements for online gambling companies. The landscape has changed over the last few years, however, with the advent of dot-net, play-for-free advertisements.

Lawrence Walters, a partner in the law firm of Weston, Garrou, DeWitt & Walters, has been representing online casino interests since the mid-1990s. His clients have had a great deal of success convincing smaller and medium-sized media outlets to accept dot-net advertisements in recent years.

"(Dot-net advertising) has gotten many companies comfortable with the companies that are promoting online gambling," Walters said. "In fact we've had a few that have progressed from running dot-net ads to running dot-com ads."

As more advertising for online gambling appears, Walters asserts, Internet gambling will gain acceptance as a legitimate industry.

Bodog.com CEO Calvin Ayre has taken that idea to the extreme. Ayre, whose Costa Rica-based site offers online sports betting, online casino gambling and multi-player online poker, is always looking for ideas that will move his company into the mainstream of the entertainment industry.

"Calvin Ayre Wild Card Poker," a televised series of poker tournaments pitting Bodog players against professionals, recently aired across the country on Fox Sports Net. Ayre is also in the process of running a "battle of the Bands" promotion that will search for the best band in America and sign the group to a $1 million record contract. Ayre plans to air at least one televised reality series based on the contest to spread the company name. By mixing different forms of entertainment, Ayre plans to weave the Internet betting experience into the fabric of American culture.

The Internet gaming industry has already begun that shift into the mainstream of society with the flotation of PartyGaming stock on the London Stock Exchange less than a year ago.

Using history as a guide, it seems highly unlikely that Congress will be able to stamp out Internet gambling. Napster gave Internet users the ability to download music for free in 1999. While the government ruled that use of its services was illegal just a few years later, the public had grown accustomed to getting its music online. The market adjusted to regulations set by Congress, and people continue to download music over the Internet today.

A survey by the American Gaming Association released earlier this month revealed that the number of people who gambled online doubled last year. Despite the industry's rapid growth and the popular belief that the federal government should not stop people from playing poker on the Internet, online gambling still faces political uncertainty. The question is, will Congress use the early 20th century model and prohibit Internet gaming, or will it look to the early 21st and find a way to regulate the industry?

Lessig and many others at GIGSE believe that if you're an Internet gaming enthusiast, the best way to ensure the latter is to let your congressional representatives know what you believe.

In his previous life, Aaron Todd was a sports journalist by day and a poker player by night. He can now be found covering the poker beat for Casino City and making horrendously unsuccessful bluffs in his home game. Write to Aaron at aarontodd@casinocity.com.