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Internet Gambling: All or Nothing at All



  Every day,  ordinary people are faced with difficult decisions.  Often, they find they need some moral compass to steer them through the flotsam and jetsam of daily living.  To this end, a growing movement of Gen-X moralists wear WWJD bracelets that remind them to ask themselves the simple question, What would Jesus do?  Living by this creed, they believe will make the world a better place, one life at a time.

            But those are pretty big shoes to fill, and the nine-to-five world seldom rewards altruism or meekness.  So perhaps the challenges of daily life would be better addressed by asking a more direct question—what would Frank do?

         Recently, Nevada Governor Kenny Guinn signed into law a bill that will, under the right combination of circumstances, permit existing casino operators to legally offer online gaming.  This doesn't mean that Strip casinos will be running internet gambling sites tomorrow, though; federal law (as interpreted by the Department of Justice) currently prohibits internet gambling, and until a court challenge or legislative action overturns this, any state legalization of net gambling is moot.  Also, the Nevada Gaming Commission will have to draft a regulatory framework.  Along the way, state regulators and commercial operators will have to figure out how to block gambling by minors and those in states where gambling is verboten.

           Still, it seems that casino operators have a definite choice to make here: do they attach their brand names (and gaming licenses) to cyber-wagering and take a grab at some of the estimated $5 billion dollars that the legalization bill's sponsors claim internet gambling will bring to Nevada casinos?  Seeing that last year's reported gaming revenue for the entire Las Vegas Strip was slightly over $4.8 billion, gaming companies are understandably interested in the possibilities.

But to enter into this market, gaming operators will have to pay licensing fees of $500,000 as well as a 6.25% tax on the necessary hardware.  This significant cost of entry will keep many operators out of the internet field.

So let's say you own a casino, or even a few. Should you plunk down your licensing fees, shoot a few hundred thousand dollars into R & D and marketing, wait for federal and state legal frameworks to be erected, and go into the online gaming business?  There is a tremendous risk involved, but also tremendous profit potential. 

What should you do?  Well, what would Frank do?

First, let's consider the whole idea of online gambling.  Isn't it galling to operators of real casinos to have to compete with  gambling sites?  Most casinos exist because once, someone had a dream of building a bigger, better casino on a plot of vacant land.  They and their associates lined up capital, hired designers and builders, and saw their dream become reality.  They train and employ thousands of workers and spend a good portion of their operating budget on maintaining a pleasant physical plant for their patrons to gamble in.  What do online gambling sites do?  Register the domain name www.2bitonlinecasino.com, buy some software, and watch the dough roll in?  Pretty much, it seems. 

How would Frank Sinatra handle this kind of competition?

His first reaction, no doubt, would be to ask some of his ominously connected friends to make an offer to the bootleg casino operators.  After all, letting two-bit operators cut into his action was never Frank's style.  When he owned a piece of the Sands, he ardently championed “his” casino, bringing his friends to play, party, and perform there.  Everyone who watched Frank knew that you could find him in the Sands Copa Room.  He knew the power of a brand name well enough to know that once you've got your name, you don't let other operators muscle in.

            Would Frank counsel opening one's own online gaming site as an adjunct to an existing casino?  Maybe not.  After all, the “old Vegas” of the Copa Room was preeminently a place where the personal touch was prized.  If a bellhop carried your bags with an extra spring in his step, you left a little something for him at the desk.  If he didn't, of course, you threatened to punch out his teeth. 

Where is the personal touch in a cyber casino?   Emailing the webmaster with your comments just isn't the same as pulling the boss aside and telling him that “everything looks OK, clyde,” as he sighs with relief.  On the owner's side, telling marker players that you hope they pay their debts before you have to sell them to “collectors” and seeing the desperate fear begin to darken their features is infinitely more satisfying than billing their Discover Card.  Internet gambling may be profitable, but it is far from personable.  It's not the way that Frank would have done it.

But Frank didn't get to be one of the most popular artists of the 20th century by doing things the old way.  For example, when his contract with Tommy Dorsey was holding him back, he sought to get out of it.  He was a man who was not afraid of change.

Contracts are one thing, though, and changing one's whole business is another.  When casinos take the step of going online, they are journeying into a whole new medium, a trip that is sure to be bumpy.  Would Frank have sanctioned leaving the familiar pastures of one's craft for an uncertain new enterprise.

As he proved in his life, the answer is yes.  In the early 1950s, his popularity as a singer was one the wane.  His bobbysoxer fans of the war years had grown into other tastes, and he faced the challenge of finding a new audience.  He heard of a war movie that was casting, took a flier on it, and ended up with an acclaimed role in 1953's From Here to Eternity that resurrected his career. The string of albums for Capitol that followed far outdistanced, in both critical and popular appeal, his work of the 1940s.  Jumping into a new artistic form helped Frank on a path that would take him though the Copa Room and into show business immortality.

Of course, jumping into new ventures didn't always pay off.  Wasn't Frank in Cannonball Run II? 

But even in his last years, Frank continued to be unafraid of trying new things.  Surely when he was first approached about singing a duet with U2's Bono, he was more than skeptical.  But in the end he took a chance, and was rewarded with a renaissance of interest in his work that brought new audiences to him.

So what would Frank do?  Probably pay his licensing fees and test the waters.  It's looking like many Nevada gaming operators will do the same thing.  Whether this is their Cannonball Run II or From Here to Eternity, though, remains to be seen.

-Dave Schwartz, July 2001

Originally published in Las Vegas City Life

 

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