Inside Asian Gaming

inside asian gaming February 2015 20 Feature In Focus of Representatives subcommittee in December of that year, the association’s new President Geoff Freeman maintained on behalf of his members that prohibition “simply does not work” and to attempt it would only create “a thriving black market and drive its economic benefits offshore”. “The government cannot put the Internet back in the bottle,” he proclaimed. “Make no mistake, Internet gaming is here to stay.” But within weeks it was revealed that Mr Adelson had a team working on just such a ban, the details of which were soon leaking to the press. By February, Mr Adelson was threatening to take Las Vegas Sands out of the AGA. In March, Messrs Graham and Chaffetz introduced the bill the Adelson forces had drafted for them. In May, much to the disappointment of Web gambling supporters within the industry and without, Mr Freeman announced the AGA would no longer advocate for legalization. It is, he said, “an issue that the association cannot lead on”. “One of the things I’ve learned in this industry is we are extraordinarily competent at shooting at one another,” he said. ‘CRONY CAPITALISM’ Sheldon Adelson and his wife personally gave more than $5.9 million to Republican candidates for national office during the 2014 mid-term election cycle, making them the country’s eighth-biggest individual donors for the year, as ranked by the non-partisan Center for Responsive Politics. This does not include money the Adelsons may have given to pro-GOP non-profit groups that are not required to identify their donors. And the casino magnate has made it widely known that he intends to spend millions more in 2016 to obtain a president of his choosing, ensuring that just about every Republican with White House aspirations will actively be courting his favor. Given his clout and GOP control of both the House and Senate it is certain the “Restoration of America’s Wire Act” will be reintroduced this year and will handily make it to the committee hearing stage. Actually, if it came to a straight vote along party lines it would pass because the Democrats, its ostensible opponents, don’t have the numbers to stop it. Except that it’s more complicated than that. Because for as many senators and representatives who oppose expanded gambling on moral grounds, and they’re to be found in both parties, there are at least as many if not more who oppose federal interference—anti-“big government” conservatives and pro-personal freedom liberals alike—into an issue traditionally left to the states. Certainly this would sum up the significance of the Obama administration’s 2011 reinterpretation of the Wire Act which so nettles Mr Adelson. Ironically, the supreme achievement of the Republican Party in making “taxes” a dirty American word is what fed the proliferation of casinos in the states in the first place as a means for cash-strapped governments to raise revenue by the back door. Now, with land-based gambling having grown to the point where it’s outstripped consumer demand, or close to it in most regions, and the sorely needed taxes it provides in general decline as a result, something like 20 states are considering taking the Internet plunge. This is according to a recent report by investment bank Morgan Stanley, which forecasts a legal Web sector of that magnitude could be generating revenues of more than $5 billion a year by the end of the decade. If all 50 states were regulating, the figure would be more like $10.7 billion. It’s true that results in the three regulating states of New Jersey, Nevada and Delaware have been lackluster to date. But what if California, the holy grail for Web advocates, were to legalize? Two bills are under consideration there. The state’s potential from poker alone has been estimated at upwards of $263 million in revenue the first year, growing to more than $380 million by Year 10. That’s according to a model assembled by Academicon, a research and consulting firm based in Germany, and data portal Poker Scout. And it’s probably conservative. They arrived at their projections, which were released in December 2013, from a 2009-10 survey of some 180,000 real-money players who each accounted at that time for $867 in average annual revenue. New Jersey, with one-fourth of California’s population of 38 million, has more than 250,000 open accounts. As D.C.-based gaming attorney Jeff Ifrah has said: “California coming online would dwarf any success that those other markets had.” Nor does this count the potential impact of shared player pools among states, something the National Council of Legislators From Gaming States has envisioned with its development of a regulatory template for states considering legalization. Released for When the lame-duck Congress returned to work after the election and the lobbying surrounding RAWA got hot and heavy, that was when the influential Grover Norquist, president of Americans for Tax Reform, weighed in and with other conservative groups penned a letter to lawmakers urging them to reject the proposed ban and “preserve” the states’ traditional authority over gambling policy. The states “don’t need the federal government babysitting them,” Mr Norquist said.