Facebook & Online Poker; Alderson Opposes Legalized Internet Poker
Facebook To Enter Into Real Money Online Poker?
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By Earl Burton – Article courtesy of the fine poker website www.pokernewsdaily.com
Rumors were abuzz yesterday about the possibility of the social networking behemoth Facebook entering into the online poker arena, but it may be that was the extent of the issue…simply rumors.
According to the popular blog “Friending Facebook” written by Emil Protalinski on ZDNet.com, Facebook has been rumored to be in discussions with several outlets regarding the future of online poker on the site. Currently, Facebook only offers “credits” that players can purchase to use to play a multitude of games that the site promotes, but it hasn’t stepped into the realm of a “real money” offering. Protalinski details out how some of the buzz regarding the possibility of Facebook stepping into online poker has gotten started.
Apparently, clandestine meetings were held over the summer between Facebook and “approximately twenty online gaming experts, consultants and social gaming entrepreneurs,” according to Protalinski. If this were to become a reality, it would happen at some point within the first three months of 2012, with the potential for up to eight licenses to be offered to potential online gaming operations through Facebook.
Protalinski notes, via eGaming Review Magazine, that two of those potential outlets have already been named as potential licensees. One of the top game developers, Gamesys, is potentially in the running for one of those licenses. Gamesys, which has been in the online gaming industry since 2001, offers bingo software as well as games based on television shows such as The Price Is Right and Deal or No Deal. The company also has a contract with Caesars Entertainment for CaesarsBingo.com.
The other operation named specifically as a potential suitor for Facebook also has connections with Caesars Entertainment, the owners of the World Series of Poker. 888 Holdings PLC, founded in 1997 and the ownership behind such offerings as 888Poker.com and the Caesars Entertainment owned WSOP.com online poker site, is rumored to be one of the companies at the front of the line for a potential Facebook partnership. 888Poker is currently the fourth ranked online poker network in the industry, having a seven day average of 2150 cash game players, according to PokerScout.com.
Protalinski points out several issues that will have to be overcome before any such partnerships can reach fruition. Age verification issues, something that anti-online gaming zealots have said would be problematic, are something that Facebook would have to deal with, as people do not always put their year of birth on their Facebook record for privacy reasons. Finding an outlet that could process real money transactions at a bulk rate would also be problematic as well as how Facebook and any partners would divvy up the proceeds.
In looking at how Facebook handles its “credits” transactions, Protalinski points out some significant numbers. Protalinski states that Facebook takes a 30% cut of revenues earned through the purchases of Facebook Credits, with the remaining 70% going to the developers of the games. To possibly see how much money is potentially involved in this partnership, PartyGaming – before it joined forces with Bwin early this year – pulled in $497.9 million in revenue in 2010. If that type of activity was seen with a Facebook gaming site – and using the same percentages as Facebook currently operates under – it would mean Facebook would make approximately $149.3 million and their partner company would pull in $348.5 million.
For American citizens, however, there is no glimmer of hope. Real money online poker through Facebook isn’t an option per the current status of online gaming in the United States. The offerings would first be done in the United Kingdom and potentially branch out to the rest of the world, Protalinski reports.
Then again, this could all just be conjecture. Protalinski contacted Facebook officials regarding this issue and quoted a representative of Facebook as saying, “We’re always in discussions with companies about lots of different ideas, but we don’t comment on future plans or speculation.” After the ringing in of the New Year, however, we may learn if these plans are true or false.
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LV Sands Chairman Adelson says he opposes legalizing Internet poker
By Howard Stutz AND Steve Tetreault
LAS VEGAS REVIEW-JOURNAL – check out the lvrj at www.lvrj.com – it’s the best paper in Vegas!
Las Vegas Sands Corp. Chairman Sheldon Adelson has broken ranks with the bulk of the casino industry, telling Washington, D.C. insiders he opposes federal legislation that would allow states to license and regulate online poker.
His comments immediately drew criticism from rival gaming operators who are hoping Congress will approve Internet poker legislation. Many casino companies have deals in place with online gaming providers to start up U.S.-based Internet poker websites catering to American gamblers.
Adelson told leaders of the Washington D.C.-based American Gaming Association he doesn’t believe available technology is good enough to prevent underage gamblers from making wagers on the Internet.
“Sheldon has long been concerned about underage gaming on the Internet, but it’s happening now and it’s totally uncontrolled,” Caesars Entertainment Corp. Senior Vice President Jan Jones said.
Caesars Entertainment, which owns the World Series of Poker, has been the gaming industry’s most vocal proponent for legalizing Internet poker.
“The solution is fixing legislation, not looking the other way,” Jones said. “His concerns are real, but I’m not sure he really understands the issue. Doing nothing is not being responsible.”
American Gaming Association President Frank Fahrenkopf Jr., said Adelson visited the lobbying organization’s offices Monday to express his “concerns about this issue.”
Earlier this year, the lobbying group announced its support for the legalization of Internet poker, believing the activity can be safely regulated. Fahrenkopf said the backing came from the organization’s board of directors. Las Vegas Sands President Mike Leven is a member of association’s board.
Las Vegas Sands spokesman Ron Reese said Wednesday that Adelson’s views “were a personal viewpoint.” The casino operator’s board of directors has not developed a strategy for the company’s position on Internet gambling.
Adelson told Capitol Hill insiders he is “morally opposed” to Internet gaming.
His view differs from most Strip casino operators, who believe Congress should legalize Internet poker in the U.S. and that the technology is in place to police the activity.
In October, MGM Resorts International and Boyd Gaming Corp. announced deals with British-based PartyPoker to operate online gaming sites in the United States if the activity is legalized.
MGM Resorts Senior Vice President Alan Feldman said that if the federal government fails to legalize Internet poker, individual states and state lotteries might step in, creating intrastate gambling sites “that would be all over the place.”
Feldman said Adelson “may not like the notion of Internet gaming, but it’s happening already.” He said the best solution proposed by the casino is federal regulation with websites “operated by known entities.”
Nevada gaming regulators are proceeding with plans to approve regulations that would allow the state to oversee and license Internet poker providers should the U.S. approve the activity.
Fahrenkopf said the American Gaming Association wants Congress to modernize and strengthen the Wire Act of 1961 with conforming amendments to the 2006-approved Unlawful Internet Gambling Enforcement Act.
“Such action would preserve the right of states to allow or disallow online companies to offer online poker to their residents and, at the same time, ensure a consistent national regulatory and legal framework,” Fahrenkopf said. “It would protect the millions of U.S. consumers already playing poker online, keep children from gambling on the Internet and provide the tools law enforcement needs to shut down illegal online operators.”
In Washington, lawmakers and lobbyists were weighing Adelson’s comments, which come as Congress is trying to complete major year-end bills.
In 2006, Republicans secretly attached an anti-gambling rider onto an unrelated port security bill that was one of the final ones to pass that year. Ever since, strategists have not ruled out similarly legalizing online gaming by inserting it into late-session legislation that could avoid major roadblocks.
Whether that might happen this year remains to be seen. Senate Majority Leader Harry Reid, D-Nev., who has been forming a bill to legalize online poker, has not tipped his hand on either the substance or the strategy behind his effort.
Adelson, who has donated millions of dollars to Republican causes, carries no weight with Reid, lobbyists and congressional officials said. But several said Adelson is influential with Sen. Jon Kyl, R-Ariz., Reid’s GOP partner in negotiations who could scotch a deal.
One report indicated Adelson had communicated with Kyl, whose office did not respond to a query about the matter. Reid similarly did not comment Wednesday.
A Senate source who was not authorized to speak and asked not to be identified, said Reid and Kyl and their respective staffs “have spoken about the issue in the past and discussions are ongoing.”
As powerful as Adelson may be, Las Vegas Sands is outnumbered by Nevada casinos eager to enter the online business.
Sen. Dean Heller, R-Nev., favors legal online gaming and will continue to push for legislation, his spokesman said.
“Senator Heller believes it’s Congress’ responsibility to craft a balanced, comprehensive approach to online poker that will provide new economic opportunities for Nevada’s gaming industry,” spokesman Stewart Bybee said. “He will continue to work with Senator Reid to find a workable solution that allows law-abiding citizens to play online poker in a safe and secure manner.”
During his congressional career, Heller received $54,400 in contributions from donors associated with Las Vegas Sands, including $12,300 from the company’s political action committee and $11,700 from Adelson , according to the Federal Election Commission and the Center for Responsive Politics.
But overall, Heller has received more than a half-million dollars in donations from other gaming sources, including MGM Resorts ($68,800), Station Casinos ($62,800) and Wynn Resorts Ltd. ($56,000), all of which favor legalized Web gaming.
Asked about Adelson’s comments, Rep. Shelley Berkley, D-Nev., said, “Everyone is entitled to their own opinion.
“I believe the time has come for legalizing online gambling that is regulated,” said Berkley, who has cosponsored a leading poker bill.
Berkley said she didn’t know whether Adelson has sufficient influence to kill legislation. But she added, “there are a number of major gaming companies that are proponents of legalizing online poker and so he is one voice among many.”
Several lobbyists who represent clients that want to see Internet gaming legalized said Adelson’s influence may be determined by how vocal he continues to be on the issue.
Among Republicans, “Sheldon is very well-respected for a lot of reasons,” said one lobbyist who asked not to be named. “The question is how engaged does he get in his opposition.”
“There are multiple other companies that are working this that might have more influence,” the lobbyist said. “Sheldon has properties in Pennsylvania and he is looking at Florida, but you have Harrah’s (now Caesars Entertainment) that is in many states.”
Also, one lobbyist said, major Indian tribes are equally interested in legalizing gambling online, and Adelson has no voice in Indian Country.
“He is not in the tribal business,” the lobbyist said.
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter. Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephens media.com or 202-783-1760.
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