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Future could bring gambling into homes, through personal computer Gaming industry explores high-stakes bets by wire


LAS VEGAS -- Those searching for insights into what will be driving the post-Cold War economy may have gotten an important, if unexpected, clue last week: Alliance Gaming Corp. announced that it was acquiring Bally Gaming International Inc. for $215 million.

Some might regard the combination of two Las Vegas companies that essentially manufacture souped-up slot machines as something less than an economic milestone.

But Craig I. Fields, a man who knows a few things about the Cold War, thinks otherwise.

This merger may prove him right by making high-stakes gambling as easy as flipping on your personal computer -- despite a raft of policy and regulatory hurdles.

Mr. Fields is the vice chairman of Alliance Gaming, but he is better known as the former director of the Defense Advanced Research Projects Agency -- DARPA -- which financed cutting-edge technologies for the Pentagon.

Among the known projects DARPA helped shape was the computer network now called the Internet.

And that is precisely why last week's acquisition was potentially important: Mr. Fields said Alliance Gaming now hopes to transform a computer network developed to defeat the "evil empire" into a powerful medium for indulging America's growing weakness for wagering.

"I'm frustrated that I haven't been able to move ahead before this," Mr. Fields said.

"I think this is going to be received as an entirely new form of entertainment. The prospects are not modest."

After years of fiddling with electronics as merely a way of enhancing the experience of those who visited casinos, the gambling industry has discovered both people such as Mr. Fields and the way to bring casinos to the people -- and into the center of American life, the home.

Perhaps equally important, it also will transform those devices into voracious collectors of information about what turns each individual gambler on, how gamblers play, what they play and when they play. These data will be used to keep people coming back.

That has been a dream of a variety of visionaries and hucksters, but now some major players may make it a reality.

Sega, the high-tech video game company, is entering the gambling business with sophisticated new devices, and other slot-machine companies are transforming their machines and putting them on-line.

But only very recently has gambling -- once isolated by government in places like this unlikely oasis of neon and temptation -- been able to enter the mainstream through a slow but significant lowering of the country's moral barriers and a steady advance of technology.

"When I was looking around for what I would do next, I decided to do something in the entertainment and gaming industries because they're now the greatest users of advanced technologies," Mr. Fields said.

"It used to be the defense industry."

If that seems jarring, consider how gambling has grown since the fall of the Berlin Wall.

The whole gambling economy, including everything from wagering on blackjack and horse racing to the money that casinos spend on alcohol, slot machines and staff, is now estimated at $482 billion a year.

The take in casinos alone, about $18 billion last year, is more than the amount consumers spent on movie tickets, theater and music concerts combined.

Every state except Hawaii and Utah permits some form of gambling now.

And the industry is organizing as never before, both to fend off assaults from the Christian right and to lay groundwork for expansion.

This summer it organized its first unified trade group, the American Gaming Association, and chose as its head Frank J. Fahrenkopf Jr., former chairman of the Republican Party.

"When you build gaming facilities, you're not putting up a factory that's spewing out smoke," said Mr. Fahrenkopf of how the industry is pitching its economic role as clean and family-oriented.

"But I'm not an advocate for the industry. My job is to make sure that whoever makes decisions at the state level has the correct facts."

How those facts are presented will be crucial as the gambling interests approach the legal hurdles to playing poker on the Internet, such as barriers against certain kinds of gaming across state lines.

In addition, there is not yet a secure means of moving money on-line and, without regulation, gamblers will have to worry whether the electronic casinos are fair in their payouts.

And there is the not unimportant question of whether gambling in your basement office will be as fun-filled as playing in a garishly lighted hall, where the air is filled with smoke and the constant ding of bells, where you can catch a Paul Anka show if you like.

"I believe we have the answer to all those questions," promised Mr. Fields.

"I can't talk about the details yet. But I think you'll see some real innovation."

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