More than $300 billion is being wagered legally each year in venues from casinos to racetracks to riverboats. Now, with the coming of new-media technologies, it's a sure bet gambling will soon enter your living room.
In August, former CBS and Turner Broadcasting Co. executive Robert Wussler invested $10 million for a 50% share in IWN, an interactive gaming subsidiary of Carlsbad, Calif.-based NTN Communications.
Airlines such as Virgin Atlantic Airways and British Airways are planning to test in-flight gambling, and Bell Atlantic Corp. and Hearst Corp. have expressed interest in developing TV-based gaming applications.
All this activity adds up to a potential boom in interactive gambling.
"Interactivity is here," said Mr. Wussler, who started Command Performance Network, an on-demand entertainment company, in 1992 after stints as president of CBS Sports and senior exec VP at Turner Broadcasting System. "There is no turning back the clock, and I believe that gaming through interactivity is a reality."
But first, interactive gambling must overcome some tough odds.
At present, only a handful of states-New York, Connecticut, Pennsylvania, Kentucky and Ohio-allow phone wagering. Any national home wagering effort would require each state to pass legislation, a process that could take years.
Still, Mr. Wussler and others believe gaming eventually will be a lucrative part of the interactive media business, amounting to hundreds of millions of dollars in revenues annually.
"None of us are going to get rich with this venture overnight," Mr. Wussler admitted. "But from the standpoint of the long view, it is the right way to go."
IWN plans to conduct a test by yearend. Details are sketchy, but users would likely be able to download information via their TV set and place bets using their remote control. IWN hopes to court advertisers to defray costs, but probably will depend more on subscriber fees for revenues at first.
Among the gaming opportunities IWN hopes to exploit are pari-mutuels, lotteries, casinos and bingo, said Colleen Anderson, president-CEO of IWN.
IWN's parent, NTN, already offers at least one gaming application, called Triples, through the GTE Main Street interactive TV service. Triples players can win prizes ranging from T-shirts to trips by playing along with live horse races; monetary bets aren't possible due to legal restrictions.
Another company, ODS Technologies, a Tulsa, Okla.-based spinoff of United Video Satellite Group, plans to test interactive wagering on horse races by yearend.
Gamblers will be able to place bets via their TV remote control and a special set-top box.
At first, bets will only be taken from customers who have already established accounts with the company. But eventually, ODS hopes to offer a system that would allow money to be transferred directly from a bettor's personal account to the track, said Mark Brenner, ODS president.
Such a system is being planned by a company called CyberCash. Formed by executives from the online and electronic payment industries, CyberCash claims its system will allow customers to pay for electronic purchases by credit card or bank transfer.
ODS' plan calls for odds to be given instantaneously, and for viewers to be able to access and download information from sources such as the Daily Racing Form.
Cross-promoting the system with restaurants and retail outlets will help defray the cost to consumers, Mr. Brenner said.
ODS expects to derive revenues from bets taken, small transaction fees and advertising.
At least one company is already tackling interactive gambling with monetary wagers, albeit from a low-tech standpoint. Ladbroke at the Meadows, a harness track located outside Pittsburgh, offers telephone-based wagering on televised races. People who have established wagering accounts with the Meadows can call an 800-number flashed on the screen to place bets.
Advertisers on the show include the local Coca-Cola Co. and Coors Brewing Co. distributors.
"We have avails just like a regular television station and are utilized by major advertisers not only through our simulcasting but via our cable show, which reaches 800,000 homes on a given night," said Tom Chaffee, director of simulcasting and a former advertising executive.
Others, including Bell Atlantic Chairman Ray Smith, see interactive wagering as a "killer application" for interactive TV. And Hearst has expressed interest in exploring a racing channel, although such developments are undoubtably far off.
Not so far off, perhaps, is in-flight gambling. Both British Airways and Virgin Atlantic say they plan to offer it on some flights by yearend; passengers would be able to use seatback terminals to place wa-gers.
But because of its anticipated ease of access, interactive wagering is likely to face even more opposition than traditional gambling.
"I know of kids who received credit cards and used them, running up huge bills. What is to stop that from happening with home betting?" asked Arnie Wexler, outgoing president of the National Council on Compulsive Gambling. "They don't even call it gambling anymore. It's now gaming or entertainment.
"Why go to work when you can sit in your underwear and bet your day away?" he asked. "There must be some control to this."
Industry exectives believe some form of warning and wagering limit could be imposed, although most believe it's up to the consumer to control his or her wagering patterns.
One thing interactive gambling has going for it is its demographics. Most gamblers are middle-age men with moderate to high incomes, the same target audience expected to respond favorably to interactive technology.
"We are very strong in the 35-to-55 demo," said Tony Mediate, director of marketing and communications for Ladbroke at the Meadows. "The ratio is usually 80-20 male; on certain nights it is 65-35."
For the right advertiser, linking with interactive gaming may work. Several companies, including ODS Technologies, plan to establish "smart cards" that would automatically debit the bank account of a gambler. Use of such cards could be tracked, much as casinos track the buying patterns of players.
"With more and more acceptance of gaming, the attitude of corporate advertisers and their agencies is that racing is a viable market," said Mr. Chaffee of the Meadows.
Horse racing already has the Chrysler Triple Crown Challenge and Cadillac Hambletonian. It's only a matter of time before such events, and their ads, go interactive.