Gambling’s richest man Sheldon Adelson, who has built a US$25 billion casino and resort empire, is planning a major political campaign against the legalization of online gaming in the US for 2014.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at firstname.lastname@example.org.
Las Vegas Sands Chairman Sheldon Adelson / Getty
In earlier interviews the CEO of Las Vegas Sands explained his opposition was not due to heightened competition, but to protect the underage and vulnerable.
Adelson explained how online gambling would be detrimental to society, since accessibility through online and mobile increases the propensity for addiction. He stressed that technology isn’t yet sufficient to prevent underage gambling whereas land-based gaming is more controlled, as “no land-based casino, whether it is us or Caesars, would allow somebody that is out of control to sit and gamble.”
Gambling at casinos is big business all over the world, not least in the United States with glittering gambling palaces at Las Vegas, Atlantic City and other venues including even on some Indian nations’ reservations.
Sheldon Adelson’s Las Vegas Sands is the biggest corporate fish in the gambling business today, with huge casino resorts both in Vegas and also in Macau where today most of the money is, coming from wealthy Chinese who love to gamble and tourists from all over the world.
All things change though and, as it has in so many other areas, the internet has the potential to fundamentally alter people’s behavior in how they gamble as well. Outside of the US online gambling is already quite popular, in the UK and other places, but at least until 2011 it was always considered a federal crime in the United States itself and was vigilantly and vigorously excluded there, including where sourced from abroad.
However as the fiscal condition of many US states deteriorated with the financial crisis of 2008, pressure developed then to ease some of the legal restrictions on online gambling if it was authorized by the states themselves, so they could make some extra money from it to replenish their empty budgets.
Accordingly the US Department of Justice issued a legal opinion in 2011 concerning then proposed online lotteries which were being developed by both the states of Illinois and New York. The opinion was limited in scope and otherwise fairly opaque in its application to the more general issues. It indicated that if such state authorized lotteries were marketed to customers residing only within the specific state, and satisfactory technologies could be developed to prove that this would always be the case, then it would be legal and not transgress the “Wire Act” of 2006, one of the laws enacted in 2006 dealing with online gambling, even though they would be using out-of-state payment processors, and even though the use of the internet itself might frequently involve signals routing that did indeed cross state-lines as well.
Since this opinion was issued by the Justice Department a number of states have now begun to develop online gaming proposals, some in conjunction with existing casino operators, including Adelson competitors Caesars Entertainment which is controlled by Appollo Global Management’s Leon Black, and MGM Resorts.
The key additional question no longer seems to be whether such proposals will move on from only such intra state lotteries, but to other forms of online gambling as well. In many people’s view it is now creeping inexorably in that direction despite the limited nature of the 2011 opinion itself.
This is where Sheldon Adelson has stepped into the political fray, still fresh from his US$100 million foray into national politics in support of Newt Gingricht in the last presidential election campaign, from which he emerged bloodied but obviously unbowed.
In an op-ed article published in Forbes in June Adelson came out swinging against internet gambling. His opening two sentences were: “Click your mouse and lose your house isn’t a marketing slogan for advocates of legalized online gambling. But it should be.”
He continued in similar vein:
“As an industry leader, and more importantly as a father, grandfather, citizen and patriot of this great country, I am adamantly opposed to the legalization and proliferation of online casino gaming.”
“You would think the chairman of the world’s largest gaming company would pursue any aspect of gaming which could increase profits, right?”
“Ordinarily that is true – but online gambling is ‘fool’s gold”.
He then went on to urge Congress to rewrite the offending Wire Act or pass additional legislation making all internet gaming illegal nationwide once and for all.
Currently there are just three states in the US – Nevada, Delaware and New Jersey – that regulate online gaming. Many more states may also move to regulate online gaming as well if these three should do well with it.
Well it is now reported that Sheldon Adelson is planning a major political campaign for 2014 specifically to influence this issue, obviously aiming to catch this in the bud if he can while regulation is still at its earliest stages.
His continued push against Internet gambling will also be a test of the influence that a huge donor is able to deploy when legislators know he is willing to spend millions of dollars to help determine an outcome. And, especially one which clearly also affects his own business interests as well with his own regular casinos, though these he could of course mitigate by simply joining the party.
The moral issue itself is a little clearer as even advocates of more online gaming understand the need for careful limits and safeguards for those who are potentially addicted, or poor or otherwise vulnerable, including children.
Click your mouse and lose your house – are you ready to play?