Harrisburg, Pa., couple develops market for gaming software. - Knight Ridder/Tribune Business News

By Ellen Lyon, The Patriot-News, Harrisburg, Pa. Knight Ridder/Tribune Business News

Nov. 9--Harrisburg natives Linda and Donald Bailey are gambling that the return to their hometown after a long absence will pay off.

The founders of the 4-year-old Atlantis Internet Group, which specializes in development of gaming software and management of online casinos, couldn't have timed it better.

In March, the Baileys opened a satellite Atlantis office in a carriage house behind a Front Street mansion in Harrisburg. In July, the Legislature passed a bill that authorizes slot machines at racetracks and other sites in the state.

'Because we do slot-machine software ... we're interested in the market here in Pennsylvania,' Donald Bailey said. 'We've created some real milestones for our industry,' including one of the first interfaces between online games and traditional slot machines.

Atlantis, which went public in April, posted less than $1 million in revenue last year, 'but we expect our revenue to grow as we grow and the industry grows,' he said.

Donald Bailey, a 1974 Harrisburg High School graduate, left the area to attend Tulane University in New Orleans. After graduating with a degree in business, he worked for several Fortune 500 companies.

On a visit home, he met Linda, a graduate of Bishop McDevitt High School, who was working in the Governor's Office of General Counsel.

They married in 1994 and moved to California, where Linda Bailey graduated from Santa Monica College and worked for a national health-care corporation also on the Fortune 500 list.

They moved to New Orleans, where Donald Bailey founded a waterfront development company called Atlantis and designed, among other projects, a riverboat casino.

When they formed their software design company, which is based in Henderson, Nev., and has offices in Moscow and the Netherlands Antilles, they kept the Atlantis name. They decided to return to Harrisburg to be near their families as they raise their 7-year-old son.

With about 15 employees, 'we're really kind of a mom-and-pop organization,' said Donald Bailey, who starts work at 2 a.m. so he can communicate with his overseas employees.

He acknowledges that it's a bit ironic that Atlantis has become so identified with gambling.

'I come from a very religious family, and my wife comes from a law enforcement family,' he noted. 'I'm not a big gambler.'

But Bailey said gambling, if done in moderation for entertainment, can generate revenue, jobs and business opportunities in communities. It's an issue that should be left to voters, he said.

A new wrinkle within the past decade is online gambling, which requires a computer with Internet access and a credit card.

'We develop the software that allows individuals to play online,' Bailey said. 'What we're really doing is bridging the gap between online and traditional gaming.'

Online gambling is so new that most states don't have legislation addressing it, but it already has grown to a $6 billion-a-year industry worldwide, he said.

Atlantis has offered to donate a one-year license to use its online casino-management software to any state that passes a law allowing Internet gambling.

Casinos would pay between $250,000 and $500,000 a year for such a license, according to an Atlantis news release.

The company estimates that states could rake in more than $600 million a year on just 15 percent of the gross winnings of Internet casino operations.

In the United States, Atlantis' online gambling products are used as marketing tools. 'What we do is offer a tutorial product and a marketing product for traditional casinos,' Bailey explained.

For instance, Atlantis designed a Web site with free, play-for-fun games for the Avi Tribal Resort and Casino in Laughlin, Nev. Players can win complimentary stays and meals at the resort.

'We offer probably one of the most realistic products on the market,' Bailey said.

You can hear the sound of dice rolling in the games on Atlantis' Web site.

Atlantis also designs non-gaming software, including an operator-assisted search engine called Web Directory Assistance.

The Baileys are realistic about business prospects in their home state.

'They just passed slots here, so I don't see online gaming [anytime soon],' Bailey said. 'We would certainly like to be a slot product provider.'

He said he already has introduced Atlantis products to Penn National Gaming officials, who plan to open a slot-machine facility at the Penn National Race Course near Grantville in 2006.

'We're able to come back now with some good experience and a good network of people and resources,' Linda Bailey said. 'We'd like to contribute to this new industry here.'

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