12/15/2006 12:00AM

Two major players buying into online gaming

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LAS VEGAS – Many folks, including myself, see a lot of similarity between buying stocks and betting on horses.

When horses are being bet, or not being bet, horseplayers have a tendency to follow the action, whatever the tote board is telling them. In the stock market when experts make recommendations to buy or sell a company, or stocks within an industry, many people follow suit with a herd mentality.

This train of thought leads into an observation of the online gaming industry. On Oct. 13, President Bush signed into law new legislation banning banks and credit card companies from settling payments between online U.S. gamblers with online gaming sites.

The knee-jerk reaction was that some major online betting companies literally went out of business. Others lost millions of dollars of paper value overnight. Investors who held stocks in some of publicly traded online gaming companies sold out as fast as humanly possible.

Only time will tell if these traders and extinct online gaming companies were right or wrong to act. But I’m here to tell you that some major players, a lot smarter than you and me, have recently taken the tack that this is a “buy low, sell high” market scenario for online gaming.

One of the big players moving forward, not backwards, is Calvin Ayre, head of Bodog.com. Here in Las Vegas, there is a huge outdoor billboard featuring Ayre flanked by two comely girls in a high-traffic area near McCarron International Airport. The advertising pitch is that Bodog is training poker players for Las Vegas casinos.

Ayre is moving his company to Antigua and is reinvesting in the online gaming industry. Bodog has purchased important client lists from defunct companies and is growing the company’s infrastructure, a sure sign that Ayre expects more online business, not less, in the near future.

The other smart player is the Las Vegas Sands Corp. It has agreed to partner with Cantor Gaming to establish an online gaming website targeting gamblers in the United Kingdom. The Nevada Gaming Control Board is keeping a close eye on the project. Its main concern is whether safeguards will be adequate to prevent U.S. citizens from setting up accounts and gambling on the site.

The key is that the Las Vegas Sands is willing to spend this seed money with long-term goals in mind. Company president Bill Weidner told the Las Vegas Review-Journal, “as the Internet gaming landscape continues to evolve, this effort will put us in a strong position to evaluate and react to other potential opportunities.”

It’s apparent these two groups are posturing for the future when the prohibition of online gaming may someday change to regulation and taxation.

Richard Eng is the turf editor for the Las Vegas Review-Journal and author of “Betting on Horse Racing for Dummies.”