updated 8/9/2005 9:24:23 AM ET 2005-08-09T13:24:23

A first-of-its-kind computer program has one of the world's largest casinos locked in a dispute with regulators who are steadfast against any loosening of U.S. rules against Internet gambling.

It's called PlayAway, an Internet-based game offered by the Foxwoods Resort Casino that lets gamblers buy keno tickets at the casino, check their status from home and play a simulated slot machine or a hand of blackjack or poker that wins or loses depending on the keno results.

Foxwoods officials, who launched the game then quickly shut it down because of state objections last month, say it's just a different way of displaying traditional keno results, which are already available online.  (Keno is a lottery-like game in which bettors select numbers they hope will come up in a drawing).

But state officials believe it is Internet gambling and have threatened to sue if Foxwoods puts the game back online.

Foxwoods agreed to suspend the game until Aug. 15, two weeks later than its original restart date.  The casino, owned by the Mashantucket Pequot Tribal Nation, will use the extra time to provide detailed information to state regulators.

Foxwoods is the first casino in the country to try such a venture.  If it succeeds, members of the National Indian Gaming Association expect the idea will attract other tribes.

Casino regulators in New Jersey are also watching, because the Casino Control Commission is considering allowing Atlantic City gambling halls to use such software.

Foxwoods believes the issue is a matter of appearance.  The PlayAway Web site never explained that the fancy blackjack and slot machine graphics were just a facade, a way to heighten the experience of checking for a winning keno ticket.

"Clearly the impression when you first went onto the Web site was that this was online gambling," said George Henningsen, chairman of the tribe's gaming commission.  "It looks like you're playing.  I know you're not, but I can't argue that it looks like it."

From a gambling standpoint, Henningsen said, it's the same game they've been running for years.  He said the tribe would tweak its software so people know that, despite the animations, they aren't actually playing games.  They also plan to add a button to skip the graphics and just check the keno numbers.

Crossing the line?
Connecticut Attorney General Richard Blumenthal says the software crosses the line into Internet gambling, which is illegal.  If this promotion is approved, he said there's nothing to stop the tribe from coming back for another slight change later.

"The slope is so slippery," Blumenthal said.  "Once Internet gambling is allowed, almost any form of Web site gaming will occur."

Although a new Nevada law lets gamblers make bets on wireless devices inside casinos, Congress has refused to let U.S. casinos offer gambling online.

Meanwhile, offshore Web sites have turned Internet betting into an enormous business, one expected to generate $17 billion in yearly revenue by 2009, according to the American Gaming Association. Sites such as PartyGaming PLC, based in Gibraltar, make millions off Web sites such as PartyPoker.com.

Foxwoods officials say they don't want to break into the Internet gambling market. They say they just want to fill seats on the casino floor and call PlayAway no different that any other industry's use of the Internet for marketing.

"You're crazy not to be using the Internet," Henningsen said.  "It's a personal link to someone who you know already has an inclination to gamble."

Steve Kane, CEO of GameLogic Inc., the Massachusetts-based company that wrote the software, wouldn't discuss where else he's pitching his product but said it would be a good fit in any market.  He said Connecticut regulators' concerns are "imminently solvable."

Blumenthal said he can't foresee anything that would make the game acceptable as long as people are playing casino games online with a profit attached.

The tribe, however, appears eager to reach a compromise and expects the game to be online soon.  "At this moment," Henningsen said, "I can't see any way this will be withdrawn."

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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