Las Vegas Business Press writes...
Local dot-com may cash in on Net gambling
05/04/01
By Jeff Burbank, Senior Reporter
Chris Almida, deedee Molnick, of i2corp.com and Mel Molnick, of Home Gambling Network, may cash in on Net gaming because of a patent filed in 1995.
Tens of thousands of people at home playing blackjack games dealt live over the Internet by 10,000 dealers spread throughout Nevada. Live craps games, hosted by celebrities, broadcast to PCs and TVs. Choosing a number on a spinning roulette wheel from you wireless palm top.
That’s the future of the gaming industry that Las Vegas-based Home Gambling Network is banking on should Nevada become the first U.S. state permitted to legalize and regulate online casinos.
Legislation to allow Net gaming, AB578, passed the assembly last month and will be heard May 15 in the Senate Judiciary Committee.
Family-owned Home Gambling Network, a subsidiary of i2corp.com, believes that should Net gaming come to pass in Nevada, the casinos will want to use the company’s business model for live broadcasts of casino table games, bingo and even slot machines.
Jesse Molnick, company vice president and son of co-founder Mel Molnick, said the firm has patented the business model casinos would have to use to conduct and accept money from live broadcasts, on TV or online, of real casino games. The model, known as “remote wagering,” is the process whereby a customer would contact a casino to place wagers by credit card, cash or electronic funds via satellite, cable TV, the Internet, wireless phone or other communications device.
“Our patent covers any live wagering from a remote location, with electronic pay,” said Molnick, adding that the patent does not cover simulated “virtual” casino games that use graphic images. “You’d have cameras in front of the dealer, and the image of the dealer is sent to your home, allowing you to bet at home. [The patent] is a business model, not technology.”
“You’re taking this technology and broadcasting the [casino] games to any medium, TV, the Internet, wireless devices with screens,” said deedee Molnick, chief executive officer.
i2corp, which has yet to sell its Home Gambling Network’s concept, is a public company, located at 5392 S. Eastern Ave. Its stock was trading at 44 cents a share late last week on the Over the Counter market.
The company intends to make money by selling licenses for the Home Gambling Network remote wagering model to casinos and casino companies, then charge them a percentage of the gross gaming revenues of from 1 to 7 percent, deedee Molnick said.
Deedee and her father Mel Molnick, 57, a civil engineer, founded Home Gambling Network in 1995, the year he applied for a U.S. patent on the concept. The federal government issued the patent in September 1998. Home Gambling Network also has a patent pending in Europe that would cover the United Kingdom, Austria, Germany and the Netherlands and other countries and possessions.
Mel Molnick came up with the idea in the early-1990s, when Internet technology was still in its early stages and live video streaming didn’t exist, she said.
“We figured there was going to be the technology that would offer people the convenience of gaming at home,” she said. “We saw television, satellites as the way to distribute gambling information. We saw a way that business would be conducted that no one else saw.”
Live casino games and remote wagering would be relatively easy to get onto the Internet in Nevada since live games already are licensed to bricks and mortar casinos, unlike virtual casino games, deedee said.
Once in operation, the live games would be recorded on tape so that they could be traced and monitored by the state Gaming Control Board. Players would set up accounts with “third party financial institutions” that would also keep traceable records of wagers, money won and lost and cash balances, deedee Molnick said.
“We really believe this a golden opportunity,” she said. “It’s another way for casinos to expand their business model by offering gaming on the Internet.”
Deedee Molnick said she has been discussing remote wagering and online gaming with gaming board officials since 1998. Assemblywoman Merle Berman, R-Las Vegas, the original sponsor of Net gaming legislation this year, discussed online gaming with deedee before introducing the bill in Carson City, she said.
“She introduced herself and we talked to her from the very beginning about it,” deedee said.
The company’s patent has so far withstood legal challenge. In 1998, the firm won a federal lawsuit, filed in Las Vegas, against two Internet gaming operators in Georgia that it said had used its patent for live remote wagering. Last year, a federal judge in Las Vegas ordered an online casino on the island of St. Vincent to stop offering live gaming on its web site, saying it violated Home Gambling’s patent.
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