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Anne Lindner

I-Gaming at Internet Kiosks Raises Eyebrows in Arizona

15 August 2001

A public-access Internet kiosk owner in Phoenix is acting illegally by providing free Internet access to and advertisements for two online gaming sites, a lawyer with the Arizona Attorney General's office said Tuesday.

Gail Thackeray, special counsel for technology crimes with the Arizona Office of the Attorney General, told IGN that, because entrepreneur Glenn Richardson places advertisements for the two gaming sites on his kiosks, he's breaking several relevant state statutes, including section 13-33-03 of the criminal code, which makes it a crime to promote gambling unless you are one of the exceptions to the law. The exceptions include dog and horse racing, Indian casinos and social gambling.

The controversy surrounding Richardson was sparked by an Aug. 6 article in the Business Journal of Phoenix. Richardson said the article unfairly portrayed his business, Kiosk Systems Inc., which has 22 Internet access kiosks in public places around the city. Eight of the kiosks are in sports bars; the others are in coffee houses, Laundromats, hospital waiting rooms and hotel lobbies, he said.

Richardson's kiosks cost between 10 and 20 cents for Internet access, but it is free to visit two online gambling sites, and The terminals also have advertisements for those sites. He owns the two domain names and said that he leases them to an I-gaming company based in Costa Rica. Richardson would not name the company, but did say that he does not have a stake in its profits.

According to the article, Thackeray said Richardson is in essence delivering people to the online casinos, a class 5 felony, and that even one online casino advertisement makes the kiosks gambling devices under state law.

"The whole thing is it's designed to facilitate your placing bets through the kiosk on offshore gambling," Thackeray told IGN. "There is no legal Internet gambling in America at the moment."

Richardson said the article focused too much on what he considers a small aspect of his business. "I feel the company was wrongly portrayed as something other than a law-abiding entity (a point we strongly debate)," he wrote in a letter to the editor of the weekly newspaper.

Richardson maintains that all he is doing is providing Internet access, similar to what any ISP does. Public-access Internet kiosks are found in many public places, and it's possible to gamble using them, he said.

"Public access Internet terminals are big business across this country," he said. "And nearly every one of them accepts some form on Internet advertising. Because I happen to put these public terminals now in sports bars and happen to collect advertising revenue from an online gaming source, somewhere along the way some interested people think that this is an illegal position, whereas essentially at any public Internet kiosk you can get online and gamble, and they would be obviously just as liable."

As for why he offers free access to those two Internet gambling sites, Richardson said he would sell free access to any site whose owner is willing to pay him enough money to do so. The gambling sites are currently the only two free sites on the kiosks.

"It's an advertising relationship," he said. "That's the difference why some ads in magazines are bigger than others--because they paid more."

Richardson said the free-access setup came about for the gaming sites because charging money is a barrier to users. Traffic would be deterred from the sites if people had to pay to use them. He wants the sites to be successful because, if his advertiser is happy, the company will continue paying him for ad space.

"If I'm not driving him traffic, they're going to stop advertising. That's just common business sense," he said.

Richardson said he feels confident that his company is doing nothing illegal. He said that some of the largest Web entities, such as the search engines Yahoo! and Google, accept advertising from online gaming sources.

According to Thackeray, the punishment for a first offense of Internet gambling ranges from probation to two and a half years in prison. The first customer and the first kiosk count as the first offense.

Richardson said he knows for a fact that the kiosks have been used to gamble online because he has checked the user logs. Thackeray said she doesn't know of any plans to prosecute Richardson, but that she might not necessarily find out because a county prosecutor might handle the case.

"At this point, I don't know what local law enforcement agencies might be investigating," she said.

Richardson said he has plans to install another 30 kiosks by the end of the year.

I-Gaming at Internet Kiosks Raises Eyebrows in Arizona is republished from
Anne Lindner
Anne Lindner