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The Internet Gaming War: A Pox (Mostly) on One House

By Jeffrey Compton

When I started writing this column, a day or so ago, I was lamenting the current “state of war” over internet gaming. Monday the AP published Gambling industry fights self on Internet gambling; on Tuesday the Financial Times did a similar piece (written by Aaron Stanley, an occasional CDC Gaming Reports contributor) entitled “Casino owners battle over online gambling.” More will follow.

I don’t enjoy public conflicts among colleagues – and in this battle I have issues with both sides. The pro-legalization forces (led primarily by Geoff Freeman, president and CEO of the American Gaming Association) apparently don’t see the difference between increased regulation of internet gaming (a goal I agree with) and increased availability of internet gaming (about which I still have concerns). Based upon feedback I have received from CDC Gaming Report subscribers (primarily single casino companies, including many Native America properties), the gaming industry is hardly unified behind the concept of vastly expanded internet gaming. There are many casino executives out there who fear that expanded legal internet gaming will be bad for both their business and for society; unfortunately they lack an effective forum.

Conversely, the forces against internet gaming have taken the approach that they will do anything to get their way, including buying the highway if need be. But even a moderately knowledgeable observer of Congress knows that neither side stands much of a chance of getting what they want (total regulated legalization or total prohibition). Freeman at least admits this, but Las Vegas Sands chairman Sheldon Adelson, the vocal and financial center of the anti-Internet gaming effort, has decided to hire some has-been politicians to form a special lobbying group, “The Coalition to Stop Internet Gambling.” That has forced the pro-Internet gaming forces to do the same thing, in the form of “The Coalition for Consumer and Online Protection.” I don’t like thinking of all the good things the gaming industry could do with all the money they are going to spend on these off-setting groups, and on the whole war itself.

What really riles me is that internet gaming is not that significant an issue with many in our industry, at least judged by the news stories on our site that that industry readers choose to read. So far this year the Super bowl was big news, the aborted Borgata poker tournament was big, the Canadian being chased for millions in past-due gambling debts (primarily by the Venetian) was big, Cromwell jokes were big – but the only stories about internet gaming that attracted much attention were a Bloomberg piece on credit cards companies not accepting internet gaming bets and a commentary in which I criticized Steve Wynn’s change of heart on the subject.

So, yesterday afternoon, I was lamenting this state of affairs, and planning to tell both sides off. Then I saw the video entitled “Don’t Let the Games Begin” – an advertisement being aired around the country by Adelson’s “The Coalition to Stop Internet Gambling.” The ad begins by describing supporters of internet gaming as “Disreputable Gaming Interests,” in a setting that resembles a back-alley drug deal going down. It then gets worse, linking pro-internet gaming forces (and, indirectly, the entire gaming industry) to organized crime, terrorists, money laundering syndicates, and even Al-Qaeda.

It’s true that bad political advertisements are hardly novel, especially in the fall, and that we’ve seen attack ads against gaming before. But we’ve never before seen such overblown and inaccurate ads against gaming that were financed by the person who has made more money from the industry than anyone else in the history of the world. That’s shameful.

So, Dear Mr. Adelson: I too am concerned about the effect of widespread, legal, easily available internet gaming on both society and the existing brick-and-mortar gaming companies. But with legal regulated internet gaming up and running in various forms in three different states in the U.S., we now have the perfect opportunity to wait a while to see what how the pros and cons of this change develop. The chances that a bill passing Congress that would totally ban Internet Gaming are very low – and the chances that such a prohibition would be legally and effectively enforceable are even worse. Your tactics are unwarranted, border on libelous, and are probably ineffective to the point of being counter-productive. Raise good objections, help foster a constructive discussion, and I’ll be all ears! But no boat was ever righted by burning it.

PS – I welcome any and all comments to this column,