Adelson Rants; AGA Responds; Jersey Seeks Supreme Court Visit

sheldon addelson
Sheldon Adelson, top 2012 donor and casino magnate, readies to fight Internet gambling

By Peter Wallsten and Tom Hamburger
Courtesy of the Washington Post

Billionaire casino magnate Shel­don Adelson, whose record-breaking campaign spending in 2012 made him an icon of the new super-donor era, is leveraging that newfound status in an escalating feud with industry rivals over the future of gambling.

Adelson, best known for building upscale casino resorts in Nevada and more recently in Asia, wants to persuade Congress to ban Internet betting. He says the practice is a danger to society and could tarnish the industry’s traditional business model.

Clark County, Nev., forked over more campaign cash than almost any other county in the 2012 elections. And it’s mostly thanks to one man.

The casino mogul donated more than $95 million to political causes in 2012.

Nearly all of his competitors, including Caesars Entertainment and MGM Resorts, disagree. They say regulated Internet gambling can be done safely and can boost the industry.

To make his point, Adelson is preparing a public campaign to portray online gambling as a danger to children, the poor and others who could be exploited by easy access to Internet betting.

Three states have moved to legalize online gambling, with New Jersey scheduled to go live this month. At least a dozen others are expected to consider it next year.

The new push against Internet gambling is Adelson’s biggest foray into a legislative debate directly related to his business, and it sets up a test of the influence that a mega-donor can exert when lawmakers know he is willing to spend enormous sums to influence elections.

Adelson has begun hiring lobbyists and public relations experts in Washington and in state capitals nationwide to press his case in what is shaping up to be one of the most heavily lobbied debates of 2014.

In January, Adelson plans to roll out an advocacy group, the Coalition to Stop Internet Gambling, that aides say will include advocates for children and others who are considered vulnerable to the temptations and ­potential harms of online betting. The coalition hopes to enlist organizations representing women, African Americans and Hispanics, all seen as likely to be sympathetic to the cause.

Advisers to Adelson say he is intensely focused on the coming battle and talks about it every day with his staff. He has about two dozen experts working nearly full time on the issue.

“In my 15 years of working with him, I don’t think I have ever seen him this passionate about any issue,” said Andy Abboud, Adelson’s top political adviser.

Rival firms view Adelson’s initiative as a major threat and say they will mount a counter­offensive arguing that his proposed ban would foster a dangerous, unregulated black market.

Some competitors noted that Adelson, whose chosen political candidates lost last year, could not guarantee success, even with his ability to tap a seemingly bottomless bank account.

“We don’t make a habit of picking fights with billionaires,” said John Pappas, executive director of the industry-aligned Poker Players Alliance. “But in this case, I think we’ll win, because millions of Americans who want to play online will oppose this legislation, along with dozens and dozens of states that want the freedom to authorize any kind of gaming they see fit.”

Still, Adelson’s industry rivals say they are struck by his new assertiveness. They point with trepidation to his campaign expenditures last year, which dwarfed those of the entire industry.

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aga2013

AGA Responds To Adelson’s Anti-Web Poker Efforts

Billionaire Wants To Stop Spread Of Online Gambling
by Brian Pempus
www.caardplayer.com

Las Vegas Sands owner Sheldon Adelson will soon be launching an organization to combat the spread of legalized web gambling in the United States. Not long after the news broke, the American Gaming Association, the commercial casino industry’s top lobbying group, came out with a response.

Ironically, Las Vegas Sands is a member of the AGA, which is behind the idea of legalization of online gambling both at federal and state levels. The AGA works on Capitol Hill and thus is primarily concerned with the chances of a federal bill, also because nearly everyone agrees that a state-by-state patchwork is not ideal. Nationwide authorization in one fell swoop means a lot more money for casinos.

However, Adelson doesn’t want online gambling in the U.S. in essentially any capacity.

The AGA said in a statement:

“Time and again, government efforts to prohibit use of everyday products have failed. In 2012, Americans spent nearly $3 billion gambling with rogue offshore operators. The Internet cannot be forced back into the bottle — nor can market demand. We support pragmatism and strong regulation of online gaming that protects consumers, prevents underage play, ensures the integrity of the games and empowers law enforcement. New government efforts to prohibit online gaming will unintentionally strengthen black market providers, create more risk for American consumers, including children, and drive U.S. jobs and potential revenues overseas. We appreciate divergent viewpoints and welcome a healthy discussion on this complex issue.”

It is worth noting that Las Vegas Sands already offers mobile sports betting in Nevada, which is more or less similar to the mainstream definition of online gambling. Many also say Adelson’s moral position is inconsistent since he is a casino owner after all.

The billionaire has kept reiterating that he is worried about minors being able to play online, a fear that even the strongest advocates of web gambling admit is legitimate. Just like brick-and-mortar properties that get duped by fake IDs, online casinos don’t have perfect records at preventing those who shouldn’t be playing from playing. However, that’s the inherent risk of any industry that has restrictions on who can participate. Many obviously argue that the risks are low enough to permit the industry’s existence. Some tout the enhanced safeguards on the web.

The debate within the gaming industry, thanks to Adelson’s intensified efforts to slow the legalization of online gambling, is far over. It seems impossible to think that Adelson’s efforts could turn back the clock on online gambling developments that have happened since Black Friday in April 2011, but he apparently will try to do just that.

So far, Nevada, Delaware and New Jersey have legalized betting on the web.

Some in other states like California have tried in the past, but efforts have always failed. It seems reasonable to think that Adelson’s lobbying against web gambling in the Golden State could delay authorization there indefinitely, not that the state was going to legalize online poker anytime soon in the first place. The tribes can’t come to a consensus.

Clearly, Adelson’s commitment to spending on the anti-web poker front raises tons of questions about the future of the fledgling industry in the U.S.

Adelson is prepared to campaign against the idea of legalizing web gambling on a federal level too, but he probably doesn’t need to. Nearly everyone sees a federal I-gambling bill, whether it authorizes just poker or other games as well, as drawing near dead.

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supreme court building

U.S. Supreme Court is last option in New Jersey sports betting case

By CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL

 

After another legal setback, New Jersey Gov. Chris Christie has one option left in his ongoing battle to legalize sports betting at casinos and racetracks in his state — the U.S. Supreme Court.

But at least one Las Vegas-based gaming analyst is unsure the Supreme Court will even consider the case.

The U.S. 3rd Circuit Court of Appeals in Philadelphia denied a request for rehearing of the state’s case. None of the 10 judges that considered the request voted in favor of it.

The ruling delivered late Friday gives the Republican governor 90 days to appeal the case to the Supreme Court.

“It is unclear if the court will take the case,” Bill Lerner, an analyst with Union Gaming Research, said Monday. “Sports betting in Nevada accounts for only 1 percent or 2 percent of total gaming revenue. That said, it is a key driver of visitation particularly around marquee events.”

Lerner said New Jersey has the potential to be three or four times bigger than Las Vegas, “given the rabid Northeast sports fans and the illegal sports betting market that is likely currently prevalent.”

Casino visitors in Nevada wagered more then $3.4 billion on sporting events in 2012, with gross gaming revenues totaling just more than $170 million, or 4.9 percent of the amount wagered. At the high end of Lerner’s expectations, sports betting would generate $680 million annually in gross revenues in New Jersey.

Messages left with Christie’s staff seeking comment were not returned Monday.

The case stems from a lawsuit filed last year by the NCAA, Major League Baseball, the National Football League, National Basketball Association and the National Hockey League. The leagues successfully argued that the U.S. Professional and Amateur Sports Protection Act of 1992 prohibits states from legalizing or regulating sports betting.

The leagues argued that New Jersey’s attempt to legalize sports betting would risk damaging the integrity of their individual sports leagues.

New Jersey had argued that the federal law violated state’s rights on a variety of constitutional grounds, including state sovereignty and equal protection.

When the federal law was enacted in 1992, New Jersey failed to exercise an option within one year to permit legalized sports betting in the Garden State. Nevada is the only state in which full race and sports books operate, while sports wagering is also legal in Delaware, Montana and Oregon.

“The case has broad implications for if New Jersey were allowed sports betting other states would also likely look to follow,” Lerner said. “Along with the U.S. Supreme Court taking the case, the only other avenue to allow state sports betting would be for Congress to overturn the federal ban on sports betting outside of four states.”

New Jersey lost its first round early this year in U.S. District Court in Trenton when sided with the leagues and the U.S. Department of Justice. In September, the state lost another round when a three-judge panel in Philadelphia ruled 2-to-1 to up hold the earlier ruling.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893. Follow @sierotyfeatures on Twitter

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