Just like the crowded strip in Las Vegas, Nevada the Net is becoming home to a slew of money-hungry casino operators.
The latest online gambling parlor opens Friday, thanks to Torrey Pines Nevada, a gaming and entertainment company, and Casinos of the South Pacific, which have set up the new operation in the Cook Islands.
The owners are betting on the success of their year-old beta site, where test users have bet more than $3 million a month using play money.
Although surfers in the United States will have access to the site, the off-shore casino is being heavily marketed in Asia, Europe, and Australia because online gambling is not regulated in those regions. U.S. lawmakers have been gunning to shut down gambling sites, making the Internet an unattractive place for the casinos.
"We're staying away from the U.S. purely because we don't want to get meshed into what the regulatory people may do. If they start to favor online gambling, then we'll look at the market," said Jan Oliver, president of Cactus Consultants, which handles investor relations for the joint venture.
Torrey Pines is a publicly traded company and has received more than $1 million in funding for the project since January, according to Wendy Miller of Cactus Consultants. The company also hired the Big Six accounting firm KPMG to audit its financial transactions.
Through a clearing house in Europe, players can place credit card wagers ranging from $1 to a maximum bet of $50 per card. There is a $250-per-week betting limit per player for all games, which include Joker Poker, Straight Slots, Draw Poker, and Black Jack.
Winnings will be credited to an account set up for each player. When players choose to withdraw funds, they can get a cashier's check mailed to them or have the money wired to a bank account overnight, Miller said.
Consumers are increasingly trusting the security of online transactions, a trend that will help the online gaming market flourish. Bets sent to Casinos of the South Pacific over the Net are secured by 132-bit encryption, which offers extremely strong protection for data. In the United States, for example, the strongest export encryption product ever approved is only 128 bits.
Online gambling operations in the United States have been under fire by regulators. Currently, gambling is overseen by states, but a congressional bill was introduced in March to stop Net gambling by digital card games, slot machines, horse races, or virtual poker. New York is considering three different proposals to outlaw the practices, while a California bill is moving to keep minors from wagering online.
To taper threats of stricter regulations, a voluntary code of conduct written by the Interactive Services Association (ISA) Interactive Gaming Council was introduced last week. The guidelines target protecting the privacy and security for Net wagers, raising standards for truth in advertising, and requiring local licenses for gambling operations.