Freeman: Casinos gain status, influence as mainstream industry

June 14, 2018 4:40 PM
  • Mark Gruetze, CDC Gaming Reports
June 14, 2018 4:40 PM
  • Mark Gruetze, CDC Gaming Reports

ATLANTIC CITY, N.J. – The importance of the Supreme Court ruling on sports betting extends far beyond the financial impact for states and casinos, the leader of the American Gaming Association said Thursday.

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The expansion of sports betting into states other than Nevada cements casinos’ status as a mainstream industry, AGA President and CEO Geoff Freeman told those attending the East Coast Gaming Congress at Harrah’s Atlantic City resort.

“Don’t discount the power, the significance of policy makers wanting to be closer to what we now have, a mainstream industry,” said Freeman, who is leaving AGA to become president and CEO of the Grocery Manufacturers Association on Aug. 1. “Let’s capitalize on that.”

“The more mainstream we are, the more likely we can achieve mainstream policies; the more likely we can achieve reasonable regulations; the more likely we can talk about taxes; the more likely we can talk about going mobile.”

Freeman and AGA Chairman Tim Wilmott, who is the CEO of Penn National Gaming Inc., spoke on the second day of the 22nd annual conference. Freeman said the East Coast Gaming Congress is industry’s best gathering, even better than the Global Gaming Expo the AGA sponsors each fall in Las Vegas.

Freeman listed five areas for the industry to focus on:

  • Empowering state regulators: “States and tribal sovereign nations have proven to be effective at being regulators. The states have this under control. Just like they have with other activities, they will prove to be effective.”
  • Putting customers first: “At the end of the day, the customers are already doing this – $150 million a year (on the illegal market). … If policy makers don’t understand the efficiencies of the illegal market, they’re likely to build a legal market in name only.” He cited Mississippi’s regulations that sports betting will be legal only in brick-and-mortar casinos and Pennsylvania’s 34 percent tax rate and $10 million licensing fee as impediments to a workable legal sports betting market. “We’re putting our heads in the sand if we don’t recognize the alternatives customers have,” Freeman said. “Build a market that works for them.”
  • Strengthening game integrity: “We cannot have a viable betting market if people think the fix is in,” he said. “I get what the leagues have at risk and that people are concerned. We share that risk.” He said the industry supports the formation of a nonprofit entity similar to ESSA, which monitors suspicious betting activity in Europe.
  • Promoting responsible gaming and advertising: “We have to acknowledge that there are risks associated with this,” he said. Freeman cited the AGA’s Responsible Gaming Collaborative and its work with outside advocates, including some opposed to gambling, to devise solutions. He said the industry also must ensure responsible advertising about sports betting, and he recommended a voluntary, self-regulated approach. “We can police ourselves as industry and do the right thing. It’s absolutely critical to the future of sports betting.”
  • Encouraging private contracts with sports leagues, rather than putting it into law: The casino industry might indeed need to pay sports leagues, but it should be done through a contract between private entities, Freeman said. “There is absolutely no reason for government to get in middle of one private entity sharing money with another private entity.” He said the sports leagues are not an enemy for sports-betting operators. “The leagues have the potential to be tremendous partners. I hope you work together to expand this market as quickly as possible into other states to bring consistency in policy making and to move people to the legal market from the illegal market.”

Freeman said he’s proud of the casino industry’s growing acceptance of a big-picture view. He noted that government officials accused casinos in 2013 of not taking anti-money laundering regulations seriously. Instead of dismissing the complaint, the industry worked with the Financial Crimes Enforcement Network of the Treasury Department (FinCen), and wound up being cited as a model for other industries.

He also lauded the industry for coming together when the Internal Revenue Service suggested lowering the tax threshold on slot jackpots from $1,200 to $600. Working with the IRS not only prevented that from happening but also raises hopes the agency will adjust the threshold for inflation to $4,800.

“Remember what we just did,” Freeman said of the sports-betting ruling. “Remember the power of community; remember the power of collaboration; remember how we got there. We got here by thinking big picture. We got here by growing the pie and giving everybody a fair shot at winning their fair share.”