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In the background, slot machines rattle and ring and gamblers crowd around the roulette and craps tables. A blackjack dealer silently doles out his last card and awaits the player’s next call. Just another day at a glitzy Las Vegas casino? Nope. Through the magic of the Internet and video technology, the dealer — in reality, alone in a room that’s empty except for the blackjack table and a row of cameras — only appears to be in the middle of a bustling casino floor. And the player is nowhere near the famed lights and commotion of the Vegas strip. Welcome to the future of Internet gaming, at least as Lloyd Levenson sees it. The name partner in Atlantic City’s Cooper Perskie April Niedelman Wagenheim & Levenson represents Home Gambling Network, a subsidiary of i2corp.com, which patented the technology used to bring live gambling into remote locations such as the home. Like many of his counterparts in the gambling bar, Levenson is landing new clients and encountering new legal questions as the industry expands into cyberspace. Sometimes this work goes to out-of-towners who know the corporate, policy, and intellectual property terrain better than do players in Atlantic City or Las Vegas. Other times a veteran like Levenson can find himself acting like a Silicon Valley lawyer, playing many roles for his Las Vegas-based start-up client: marketing strategist, regulatory counsel, lobbyist, and dealmaker. Of course, before Levenson can turn his client into the casino industry’s Amazon.com, there’s a small hitch. Online gambling — currently banned by the 1961 Federal Interstate Wire Act — must be legalized. The chances of that happening are increasingly looking up. A number of states — including Nevada, New Jersey, Louisiana, and Mississippi — are considering legalizing it. Nevada is furthest along; officials are actively looking for ways to regulate it. As little as a year ago, the odds of Internet wagering ever being legalized in the U.S. were not nearly as good. Representative Bob Goodlatte, R-Va., and Senator Jon Kyl, R-Ariz., had introduced similar federal antigambling bills that would have explicitly outlawed online casinos. The big casinos, viewing unfettered growth of the online wagering industry as a serious threat, backed the legislation, sounding like Baptists with arguments that online betting could lead to underage and obsessive betting. The casino industry had reason to worry. The number of gambling Web sites being operated from unrestrictive places like Costa Rica and Antigua had skyrocketed. There are more than 1,200 gambling sites today, compared with the paltry 25 that were on the Web in the mid-1990s, says Marc Falcone, a gaming analyst with Bear Stearns & Co. In the last year alone the value of the online gaming industry, Falcone estimates, has jumped from $1.5 billion to more than $2.5 billion; by 2003, he estimates its worth will have risen to $5 billion. Falcone expects legal online wagering in the U.S. within 18 to 24 months. As this online competition has grown, the bricks-and-mortar casinos have changed their views of the Internet. Last spring Goodlatte’s bill failed to pass in the House. And where were his trusted industry allies? The casinos had withdrawn their support for the measure and were busily (but privately) crafting their own Web strategies. And that meant a sudden demand for the services of a handful of lawyers with expertise in both gaming and Internet law. Hands-down, the most prominent attorney in the Internet gaming space is Anthony Cabot, a partner with Las Vegas-based Lionel, Sawyer & Collins. Cabot has written a 500-page book on the subject and counts as his clients some of the biggest names on the strip. But he also plays matchmaker between Old Economy and New, and his clients also include the new generation of gaming technology companies. One of them, Online Gaming Systems Ltd., formed a joint venture with Station Casinos Inc., to develop an online game called “eSlots.” Sometimes having such a broad client roster means that Cabot sits out a deal or two. When MGM Mirage teamed up with WagerWorks Inc. to develop a Web site where visitors could play casino-style games for points and prizes — redeemable at the land-based casino and hotel but not for cash — Cabot, who had done work for both of the companies, was conflicted out. It wasn’t a total loss for Cabot; he says he now regularly provides advice on Internet gaming matters to both companies. Then there’s Home Gambling Network’s Levenson, a past president of the International Association of Gaming Attorneys. He says he has been retained for “everything from regulatory to litigation” work by Harrah’s Entertainment Inc., Aztar Corp.’s Tropicana Casino & Resort, and Boyd Gaming Corporation. In New Jersey, Clive Cummis, a founding partner of Sills Cummis Radin Tischman Epstein & Gross, doubles as executive vice president for law and corporate affairs at Park Place Entertainment Corporation, which runs Caesar’s Palace, the Las Vegas Hilton, Paris Las Vegas, and Bally’s Las Vegas, as well as other casinos in Mississippi and Atlantic City. Cummis says he has spent a good deal of his own time addressing the Internet issue, but adds that his client remains concerned about the possible negative effects of the entrance of gambling in the home. In London, Tony Wollenberg, whose firm recently merged with Washington, D.C.’s Steptoe & Johnson, is the leader of the U.K.’s set of online gaming specialists. Wollenberg, a poker player himself, started his gaming practice in the eighties, because he was “fascinated with the psychology of gaming.” By 1990 he had assembled an impressive roster of clients, including MGM Grand Inc. and Mirage Resorts Inc. (the two merged in 2000). If the British government takes the recommendations recently made by Sir Alan Budd, an influential former chief economic adviser to the Treasury, and passes legislation to legalize online casino-type gambling — a process that could take as long as two years — Wollenberg expects a flood of work from U.S.-based casinos eager to establish online operations in the U.K. Of course, not all the tech-related work is being handled by the gaming bar, especially when it comes to transaction work. In the past decade, as the big casinos have become increasingly corporate, they’ve unceremoniously dropped their local counsel in Las Vegas or Atlantic City and turned to the likes of New York’s Paul, Weiss, Rifkin, Wharton & Garrison, which handles corporate finance matters for Las Vegas Sands Inc.’s The Venetian Casino Resort, and Los Angeles-based Gibson, Dunn & Crutcher, which represents Park Place Entertainment on various corporate issues. Patent work in particular remains the province of out-of-state firms. In April 1999, for example, Caesar’s Palace — at the time owned by Starwood Hotels and Resorts Worldwide Inc. — filed suit against 134 Web sites that were using versions of the Caesar’s trademark and brand name to drive traffic to their sites. When the company was sold in December 1999 to Park Place in the midst of the litigation, Peter Abruzzese, the in-house intellectual property counsel for Starwood who was handling the matter, left to join New York’s Kramer Levin Naftalis & Frankel. Abruzzese continued working on the case at Kramer Levin, settling the last of the domain name disputes in November 2000. Alan Fisch, a intellectual property litigator and partner with D.C.-based Howrey Simon Arnold & White, was tapped last year by Venetian Resort Hotel Casino and Gordon Gaming Corp.’s Sahara Hotel & Casino to enforce their trademarks on the Internet. Fisch now represents Stratosphere Corporation, which runs a 100,000-square-foot casino on the Vegas strip, in patent litigation against its neighbor down the block, Harrah’s Entertainment, over a customer incentive and loyalty program. Whether casinos are battling each other over patents, or competing with Web-based upstarts for market share on the new frontier, their lawyers have an edge if they can move from casino lingo to techiespeak and back again with ease. The indigenous gambling bar has shown so far that it can straddle both worlds. The question now is whether it can hold on to its technology-charged clients.

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