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One of Australia's Four Internet Casino Operators Pulls the Plug Friday

Federal launched virtual versions of two of its land-based casinos, Wrest Point and Country Club, from a portal called SouthernCrossCasinos.com on June 1. But the moratorium, which could take effect as early as next week, prohibits online casinos that opened after May 19, 2000.

Federal had secured a license for the online operation from the Australian state of Tasmania in September 1998. The company said it spent more than $20 million to develop the sites.

A bitter Greg Farrell, Federal's managing director, complained to Australian media Thursday about having to close the business, one that suddenly was transformed from legal to illegal.

"After nearly two years of development, we missed the deadline by just twelve days," he told the Sydney Morning Herald. And he told a colleague that he's considering a legal challenge.

Federal opened Australia's first legal land-based casino, Wrest Point, in Hobart, Tasmania, in 1973.

In other fallout from the moratorium vote, trading in the stock of Gocorp Limited was halted Thursday on the Australian Stock Exchange. The company's directors plan to make an announcement Monday about the firm's future.

Gocorp's online casino, licensed by the state of Queensland, should be allowed to continue operating, however. The site, AusVegasCasino.com, went live May 16.

Two other Internet casinos operate from Australia: Tattersall's Tatts.com and Lasseters Holdings' Lasseters.com. Tatts.com, licensed by the Australian Capital Territory, opened early in October, and now will have to close. Lasseters.com, licensed by the Northern Territory, opened in April 1999 and will continue operating.

Other licenses have been issued for online sites that are not yet live. Australian tycoon Kerry Packer, for example, has a license from Tasmania and has reportedly invested heavily in a casino that was expected to be launched early next year.

Peter Bridge, chief executive of Lasseters, told RGT Online today that Australia's Internet casino operators - and those with pending licenses - will meet next Thursday in Sydney to start planning a campaign to educate legislators and the public about the benefits of strictly regulated online gambling. The goal is to head off a permanent ban, which the federal government wants to impose when the moratorium expires in May 2001.

Bridge said the industry is united in its effort. Even operators of bricks-and-mortar casinos who do not have virtual casinos are fully supportive of the effort, he said.

After Wednesday's Senate vote, Chris Downy of the Australian Casino Association said: "Australia has been recognized as a world leader in terms of regulation of online gambling. We now have a situation where the Government by imposing this moratorium has in fact done more to undermine al the efforts to bring in high standards of player protection than would have been the case if the moratorium had not been imposed."

The federal government of Prime Minister John Howard argues that stopping Internet gambling in its tracks will help prevent additional compulsive gambling, which is a serious problem in Australia. But most Australians don't even have access to these sites.

Federal's site doesn't accept real-money bets from any resident of Australia. The sites operated by Gocorp, Lasseters and Tattersall's do not accept bets from Australians unless they reside in the state or territory in which the casinos are licensed.

All four sites depend on foreign gamblers for all or most of their business. Some have additional restrictions on access. The Federal sites, for example, don't take wagers from the U.S., China or several other countries.

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