Las Vegas Sun
Harrah's Entertainment Inc. has suspended the operations of an online
gambling site based in the United Kingdom after posting losses of $9.3
million last year.
The move marks the second time a Las Vegas casino giant has tried and failed to tap into the lucrative Internet gambling market.
The site, called Lucky Me, was introduced in November 2003 for British
bettors and was suspended in October, the company disclosed Tuesday in
its annual report to shareholders.
The site was discontinued because it was losing money, Harrah's spokesman David Strow said.
Rather than the typical method of gambling for money, the Web site
allowed players to access as many games as possible -- with new games
offered every seven-and-a-half minutes -- with a monthly subscription.
Gamblers paid from about $17 to $84 per month for access to bingo and
other games with cash prizes ranging from $8.50 to $1.7 million.
Lucky Me featured an identification process that prohibited bets from
U.S. residents as well as from other countries where Internet gambling
is prohibited.
The site was developed in partnership with Revahertz Networks, a
Boston-based, privately-held software game developer that founded
Gamesville, a games-for-prizes site that was sold to the Internet
search engine Lycos in 1999.
Harrah's in January said it would dissolve a partnership with Gala
Group Ltd., a U.K. bingo hall operator, to build casinos in Britain
after lawmakers there significantly restricted the number of casinos
that can be built under a pending gambling bill. The bill, in its
present form, is expected to allow up to eight Las Vegas-style resort
casinos.
At the time of the Gala deal, Harrah's and other U.S. operators were
optimistic that more casinos would be legalized. But concerns about
problem gambling and a proliferation of neighborhood casinos led to a
more restrictive gambling bill than had been anticipated.
Strow said the gambling bill and legislative concerns didn't factor into the decision to abandon the Web site.
Similarly, MGM Mirage in 2003 shut down a gambling Web site that
catered to U.K. and European customers. The site didn't attract enough
bettors because it prohibited bets from U.S. bettors in order to comply
with state and federal laws against Internet gambling, MGM Mirage
officials said.
Many big gambling Web sites operate in a legal gray area because they
accept bets from Americans over the objections of the U.S. Department
of Justice. These sites tend to be profitable because the United
States, which hasn't prosecuted online bettors, remains the biggest
market for Internet gambling.
