Vegas' deal with gambling site folds

An Internet gambling company that wanted to use the city of Las Vegas' name

and seal withdrew its revenue-sharing offer Nov. 15 after the deal became

politically shaky.

Jim Jimmerson, an attorney and member of VegasOne.com Inc.'s board of

directors, said using the city's name and seal is a unique way to distinguish

VegasOne.com from the 1,100 Internet gaming sites worldwide. "I think it's

inspired thinking of the board of directors," he said.

For gamblers, the city's name and seal would bring credibility to the

site, he said. A study by the investment firm Bear Stearns and Co. Inc.

reported that gamblers considered a site's authenticity as a factor in using

it, he said.

Although the Internet gaming industry is unregulated, Jimmerson said

the city of Las Vegas would have performed a regulatory or oversight function

for the site, resolving possible disputes by users.

Erik Pappa, a spokesman for the city of Las Vegas, said the city council

questioned whether a government entity could be involved in such a venture.

The council also had reservations about whether the site could prevent juveniles

from gambling, he said.

"What they've told us is they're going to start this Web site without

us and if in the future the city wants to get into this, we can give them

a call," Pappa said. The company is expected to reintroduce the offer to

the city in six months.

He said a couple of public hearings on the issue showed no strong public

sentiment for or against this plan. Three council members, including Mayor

Oscar Goodman, recused themselves from discussions due to perceived conflicts

of interest.

Nevada law bars state residents from Internet gaming, but federal law

is unclear, Jimmerson said. He said VegasOne.com, which has its headquarters

in Las Vegas, would operate out of Australia. In addition, he said the company

has technology in place to preclude U.S. residents and minors from playing.

The company also promised the city about 5 percent of the gross receipts

and 25 percent of the company's annual net profits, which could reach $1

billion over the next 20 years. The worldwide market could reach $6 billion

by 2003 according to projections, he said.

Jimmerson declined to comment on a similar VegasOne.com partnership

with Atlantic City, N.J.