World Telecommunication Day 1999 |
For all the talk of a revolution in on-line shopping, the services driving real profit and traffic in the consumer market are receiving comparatively little attention. While eyes focus on the success of Amazon.com and eBay, gambling and gaming Web sites are quietly attracting increasing numbers of on-line Americans, as well as the attention of legislators and game developers.
Gambling is probably the second-most-profitable e-commerce enterprise on the Net after pornography, says Rich Prem, a tax partner at Deloitte & Touche. But figures are hard to come by, as most of these revenues go to offshore companies and will continue to do so as long as U.S. states rule on-line gambling as being illegal.
One exception is Nevada, where tolerance of gambling extended into cyberspace last January when on-line sports book betting became legal. But all bets are off unless the player is physically located within the state and connected modem-to-modem, not over the open Internet, says Greg Gale, acting chief of the state Gaming Board's Electronic Services Division.
Nevada's first on-line gaming license was awarded to International Sports Wagering (ISW) of Little Falls, N.J., for its Sportxction application. Developed at a cost of $8 million, Sportxction allows gamblers to bet in real time on a live sporting event from their home PCs or from a dedicated kiosk at a casino. Odds are constantly updated, based on almost any major or minor incident during the game. For example, in the 20 seconds or so between baseball pitches, the viewer can decide whether the next throw will be a ball or strike, or in soccer whether one side will win a free kick within a certain time period. They are then given a fixed price for the bet based on the amount they want to win.
Sportxction was developed at cost of $8 million, and Barry Mindes, chairman and founder of ISW, likens its complexity to that of a stock exchange. Odds can be updated as quickly as every four seconds, and the system automatically shifts the prices to ensure equal payouts whatever the outcome, leaving ISW to collect the commission. ''We're in the brokering business, not the gambling business,'' Mr. Mindes says.
While Nevada intends to corral on-line gambling within its borders, an estimated 47 jurisdictions around the globe currently license or regulate on-line gambling.
The National Gaming Impact Study Commission, which reported to Congress in June, expressed concern that such offshore havens shelter ''Internet gambling organizations that prey on American citizens'' and recommended that the federal government should apply pressure abroad to outlaw such gambling activity.
On-line gaming, on the other hand, is considered a relatively safe pastime for Americans, without the need for the state's intervention.
According to the Yankee Group of Boston, adults are the primary game players in 40 percent of console-owning households, playing for an average of three hours and 17 minutes each week. Yankee believes the launch of Internet-ready consoles, such as Sega's Dreamcast (released last month), could potentially attract 12 million new customers with built-in features such as Web browsing and e-mail.
An Internet connection also opens up possibilities for multiplayer gaming, a fast-growing area and a major focus for PC-game developers as well as console makers.
Quake III Arena, the latest version of the popular 3D shoot 'em up game created by id Software, is optimized for ''deathmatch'' play - games that pitch real humans against each other rather than preprogrammed adversaries. New players can practice off-line against opponents programmed to act like humans, called ''bots,'' and then shield behind a ''newbie'' ranking when they venture on-line to avoid being pummeled by experienced gamers.
Graeme Devine, project manager for id Software, says that earlier Quake versions I and II showed that ''while we had just made these fairly complex single-player games, the part of the game people found addictive was playing on-line deathmatch.''
Mr. Devine says id has not abandoned the single player with Quake III programming: ''We're really interested in bringing the feel of deathmatch and an intelligent human-like enemy into the single-player experience,'' he says.
Sheridan Nye