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Forbes’ Nathan Vardi recently penned an opinion piece detailing the various victories casino tycoon Sheldon Adelson has racked up in his quest to stop the progress of regulated online gambling in the United States.
Tally up those triumphs, Vardi argues, and you arrive at the titular conclusion of the article: “Sheldon Adelson Is Winning His War Against Online Gambling.”
I’m not convinced. In fact, I’d submit that if Sheldon Adelson had never made a peep about regulated online gambling, the industry would still be more or less where it finds itself today.
Vardi kicks off the piece by noting that “online gambling efforts in key states like California appear to be stalled.”
A few points here: First, Vardi doesn’t directly link Adelson’s efforts to the stall. Second, the pace of online gambling regulation was already quite sluggish before Mr. Adelson made his displeasure with the activity known.
Most critically, “key states” aren’t actually stalled. In California, 13 powerful tribes recently reached a historic agreement on unified language for an online poker bill, and in Pennsylvania, recently introduced legislation has positioned the state closer to regulation than it’s ever been.
Vardi then shifts to the federal level, noting that “the best that online gambling supporters can say [… ] is that Adelson is no closer to implementing a federal online gambling ban than they are to pushing through a federal regulatory regime for online gambling.”
That’s not a win for Adelson – it’s a continuation of the status quo. Congress making Adelson’s Restoration of America’s Wire Act a priority – or even indicating a willingness to let it escape committee – would be a win for Adelson.
Worse for Adelson is that his unproductive effort at the federal level is actually counterproductive at the state level.
At recent hearings in Pennsylvania and Massachusetts, the threat of a federal ban was invoked by witnesses as a reason to accelerate, not abandon, online gambling regulation. And Adelson’s mere presence in the debate has helped coalesce the previously fragmented pro-regulation camp in states like California.
But Adelson has, Vardi notes, “managed to get the American Gaming Association, the casino-industry’s powerful lobbying group, to stop supporting online gambling.” That’s true. It’s also the first tangible impact Adelson can reasonably be assigned responsibility for. So how much does it matter?
You can make a strong case for “not much.”
The AGA wasn’t a factor in the regulated online gambling debate prior to the arrival of new CEO Geoff Freeman in July of 2013. While Freeman was an articulate voice for the pro-regulation camp, his advocacy was focused on the federal level, where nothing’s happening anyway.
Vardi nods to this reality by vaguely referencing AGA “plans to support online gambling on the state level” that were “derailed” by the group’s exit from the debate.
Ok, but it’s difficult to point to a specific state where regulation’s chances have been (or would have been) materially impacted by the AGA’s departure. And if there is a void, other groups will fill it.
Adelson’s winning streak continues: He “has successfully disrupted the pro-online gambling coalition that has included high-profile retired politicians like Richard Gephardt and Alphonse D’Amato,” says Vardi. To the best of my knowledge, both D’Amato and Gephardt are still lobbying for online poker.
Then there’s Steve Wynn, who, Vardi asserts, “flip-flopped” on online gambling after Adelson came out in opposition.
Read Wynn’s comments for yourself and see if you agree with me that Wynn’s position on online gambling is far more nuanced and mutable than Adelson’s. In any case, Wynn has been relatively mum on the issue since. And his company continues to hold approval from New Jersey regulators to take part in the state’s regulated online gambling market.
Vardi continues the thread: Adelson has “attracted his own share of prominent former politicians to champion his cause.”
A billionaire hiring a handful of lobbyists is hardly a coup.
As for the governors that have flocked to Adelson’s side – Nikki Haley, Rick Scott, Mike Pence, Rick Perry and Bobby Jindal – all harbor presidential ambitions or are known recipients of Adelson’s political largesse.
We next return to things that Sheldon Adelson has had nothing to do with (save simultaneous existence): “At the same time, the online gambling numbers in New Jersey look terrible, potentially discouraging other states thinking about embracing it in order to solve budget problems,” Vardi opines.
Ah, the “terrible numbers” of New Jersey.
They look terrible, of course, only in comparison to Chris Christie’s bat-guano-crazy predictions for online gambling revenue.
Remember, Christie took the revenue projection issued by Wells Fargo for the fifth full year of online gambling in New Jersey – a projection that was already an outlier – and just plunked it down, with no adjustment, into the six months between launch in late November and the close of the fiscal year at the end of June.
And how is New Jersey’s allegedly dismal performance a win for Adelson anyway?
Vardi makes the link by saying the numbers are “potentially discouraging other states thinking about embracing it in order to solve budget problems.”
Logical enough, but Vardi doesn’t identify any states he thinks have been discouraged. And he fails to mention an essential fact from the other side of the scale: New Jersey’s launch of online poker and casino games has encouraged other states to move forward by proving that the technology and regulations in place are up to the task of creating a safe, robust online gambling market.
Vardi wraps up with a few miscellaneous shots at online gambling, all disconnected from Adelson: quoting a French regulator as saying the online poker “fad is over” (Coppolani made the comment in the context of explaining that the poker market was “mature,” not that it was akin to a pet rock), asserting that the bad actor dispute has “frozen efforts in Sacramento” (the release of a unified tribal bill suggests otherwise), and noting that Caesars Acquisition Company’s stock has dropped by roughly a quarter since March (hardly a reflection on the market at large given the company’s other pressing problems).
“Adelson is not,” Vardi admits at the end of his article, “responsible for all of online gambling’s setbacks in the last six months.”
To my mind, he’s hardly responsible for any.