A year-old smart card company is betting on the public's infatuation with gambling.

Kaosc - the name is an acronym for "killer applications on smart cards"- has developed a smart card system that lets bets be placed using remote devices such as personal computers, cellular phones, or Palm organizers.

As card readers or devices with card slots get into consumers' hands, "the actual playing of the game doesn't have to be on-line anymore," said Gavin Shenker, president and chief executive officer of Kaosc in Redwood City, Calif. "The growing smart card infrastructure being driven by companies like Microsoft and American Express creates an ideal base on which to piggyback a system such as smart card gaming."

Kaosc aims to sell cards and the software that goes with them to casinos, on-line gaming companies, and state-run lotteries. That industry has been seen as ripe for smart cards - some casinos issue them in-house and MasterCard International's Mondex card has been in a demonstration with a Norwegian state lottery agency. But bankers have generally steered clear of this market, perhaps for image reasons.

"The connotation that gambling is illegal affects the card, but gambling is illegal only in two states," Mr. Shenker said. "We just have to get around that stereotype. Anywhere gambling is legal, this card could replace the entire gambling system."

The Kaosc gaming application, which is being tested on a Gemplus smart card with 2K of memory and a Java-programmed card with 16K of memory, occupies 1.5K of memory, leaving room for additional programs such as loyalty points.

The multiple-application aspect is "one of its selling points," Mr. Shenker said. Points won from card games or slot machines could be used as frequent-flier miles or redeemed for cash, for example.

To call attention to its product, Kaosc is offering $1,000 to anyone who can break through its security controls.

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