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PlayStar Responds to Kyl Bill to Prohibit Internet Gambling
DOVER, DEL. (July 30) BUSINESS WIRE -July 30, 1998--PlayStar
Corporation (OTC Bulletin Board:PSCK) PlayStar Corporation (OTC BB -
PSCK) today commented on the impact of the proposed legislation to
prohibit Internet gambling, as passed by the Senate last week.
PlayStar, incorporated in Delaware, develops and markets Internet
Gaming systems and electronic commerce services. The Company believes
that the Internet Gambling Prohibition Act passed by the Senate last
week is so riddled with problems that it is unlikely to become law.
PlayStar President Julius Patta, citing sources in Washington, is
confident that the House of Representatives will take a more balanced
approach to regulating Internet Gaming. "This is a knee-jerk reaction
from the Senate, and we are hopeful that the House can take a step back
and measure the implications of prohibition and of this Bill," said Mr.
Patta.
"The Senate, in targeting Internet-based betting, is attempting to
come to grips with new technologies based on old and outdated legal
concepts," explained Mr. Patta, comparing this Bill to prohibition of
alcohol earlier this century. "Solutions which failed in the 1920's
will likely result in the same disastrous effects today, including
making criminals of ordinary people, and fostering organized crime.
What the public needs from its legislators is leadership based on the
new realities of the Internet, the Global Village, and America on the
verge of a new Millenium."
The Justice Department itself has questioned the wisdom of the Senate
Bill. Acting Assistant Attorney General L. Anthony Sutin wrote in a
letter to Senator Patrick Leahy: "We believe, however, that there is
considerable value in waiting until the National Gambling Impact Study
Commission has concluded its study of the scope of Internet gambling
before passing new legislation that would change the way in which
Internet gambling is regulated or prohibited." The Justice Department
also admits that it is "certainly true" that it would have "no
intention of prosecuting individual bettors," as is provided for in the
current Bill.
The Washington Post echoed these views in an editorial July 25th,
arguing the Bill "means a considerable increase of federal intrusion
into private behavior," and "the increased level of intrusiveness here
is hard to justify".
One thing is for sure: people will gamble. Gambling is embraced as an
acceptable pastime, in some form, by 48 of the 50 states, and by
Congress itself in the District of Columbia. A 1997 survey by Harrah's
Entertainment Inc. showed "An overwhelming majority of U.S. adults --
92 percent -- say casino entertainment is acceptable for themselves or
others." Commenting on those statistics, Mr. Patta said "Americans
value their freedom, love to bet, and resent an overbearing,
paternalistic government telling them what freedoms they can and cannot
enjoy, and what they are allowed to do with their free time and money."
PlayStar stands to benefit from the proposed legislation on Internet
Gaming since it will restrict large, well-known gaming companies such
as the Mirage, Trump, and Circus Circus from offering Internet-based
gambling. However, the Company wishes to distance itself from the
numerous criminal operators who will no doubt enter the market.
"Prohibition raises the stakes, and therefore the incentive for crooks
to enter the game", explained Mr. Patta. "We may believe that 90
senators are nave enough to think that this Bill will protect the
public. We may even believe that voters are nave enough to think this
will protect the public. But I can guarantee you that the new Digital
Mafia, the e-Capones out there are not so nave as to miss the
opportunity the Senate is giving them to hurt innocent people."
The human tragedy behind the Internet Gambling Prohibition act lies
not in the crime which will be created, but in the missed opportunity
to protect American citizens, and the potential harm which will come of
criminal gaming. As Wisconsin Attorney General Jim Doyle, observed in
Inter@ctive Week, August 26, 1997: "We don't expect to stop all online
gambling, but I think a federal law will keep the legitimate operators
out of it."
Children, whom the Bill is most designed to protect, will be left with
no protection. The "legitimate operators" driven out of the industry
will only be replaced by unscrupulous ones, who will specifically
target children and the most vulnerable. And given the global nature of
the Internet, it will not be hard for these sites to prey on kids.
"Messrs. Kyl and Doyle will ultimately have to answer to the people who
get hurt," said Mr. Patta.
Fortunately, the often-quoted problems of Internet gaming have some
real chance of effective solutions. PlayStar, by itself and through
membership in the Interactive Gaming Council (IGC, the pre-eminent
industry group of online gaming operators, government regulators, and
related companies), is taking the lead in programs to protect the
public. Michael Elek, PlayStar Business Development Consultant, is
Chair of the IGC's Responsible Gaming Committee: "In the eight months
since the formation of the Responsible Gaming Committee, we have taken
significant steps to promote responsible gaming, steps which the
traditional land-based Casinos would do well to emulate," explained Mr.
Elek. "We require our members to be pro-active in avoiding problem
gaming. We have put into place an outreach program to help gambling
addicts, published Responsible Gaming Guidelines which were
overwhelmingly endorsed by our membership, instituted a program for
Internet Gaming operators to register their sites with filtering tools
to keep children from gambling, and are working on a program whereby
problem gamblers can register for exclusion from participating
casinos."
President Clinton, on the subject of making the Internet safe for
children, addressed some viable methods which can achieve the Senators'
goals and are available today. "The computer industry is developing a
whole toolbox full of technologies that can do for the Internet what
the V-chip will do for television," remarked the President in an
address on July 16th, 1997. "They give parents the power to unlock --
or to lock the digital doors to objectionable content." The President
added "Now we have to make these tools more readily available to all
parents and all teachers in America, ... and we have to make sure that
parents are trained to use them."
Moreover, the often-cited justification for prohibition, that of a
child losing the family house through playing on Daddy's credit card,
is simply not realistic. "There are protections build into the credit
card system to prevent this from happening," said Mr. Elek. "We have
been trying to educate Congress on the realities of the Internet, and,
fortunately, slowly, some members see that there are viable
alternatives which are preferable to prohibition. But they are still
the minority".
PlayStar and the IGC would like measures enacted to increase
protection to the public and control for government regulators,
including thorough screening of Casino operators, testing of Internet
Casino systems, and an effective dispute resolution process. "Why do
people trust land-based Casinos?" asked Mr. Elek. "Three reasons: The
owners and operators are carefully screened, the casino games and
gaming areas are regularly inspected, and there is a powerful
government regulatory board to adjudicate disputes." The IGC is
currently working on just such a framework, in cooperation with the
Government of Antigua, and is inviting the US and other regulatory
bodies to join them. "These are the real ways to protect the public,
not to blindly prohibit gaming and throw everyone to the wolves."
On the impact of the Bill for PlayStar's business, Mr. Patta
explained: "We see this Bill as being unenforceable, ill-advised,
probably un-Constitutional, and ultimately harmful. Internet Gambling
is being embraced by modern nations across the Globe, from Sweden to
Australia." PlayStar is worried that the United States is being left
behind in terms of technology, electronic commerce, taxation, and
telecommunications, by countries such as Liechtenstein and Dominica.
"The Senate is abdicating its role as protectors of the people, and all
this to support an anti-gaming minority and some outdated laws."
PlayStar will receive software licensing revenue from gaming companies
operating within the law, in whichever jurisdiction they are located.
"PlayStar's first licensee in Antigua is ready to offer live,
Internet-based gaming products next month," explained Mr. Patta. "The
gaming operation has a license and the full support of the government
of Antigua to operate a legal Internet-based Casino. The license has no
stipulations as to where the bettors are located, and they will operate
accordingly."
This news release contains certain forward-looking statements, which
may involve a number of risks and uncertainties that could cause actual
results to differ materially from those projected.
-0- ajk/cgo*
CONTACT: PlayStar Corporation
Michael Elek, 416/408-2100
melek@playstar.com
URL: www.playstar.com
KEYWORD: NEW YORK DISTRICT OF COLUMBIA DELAWARE
INDUSTRY KEYWORD: ENTERTAINMENT COMPUTERS/ELECTRONICS COMED
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