What's interesting about the Op-Ed that appeared in Forbes last month about how Internet gambling is "a societal train wreck waiting to happen" is not the argument -- it's common anti-gambling fare -- but the author: Sheldon Adelson, the chairman and the CEO of the world's largest gambling company.
But Adelson, despite making more than $20 billion off his casino empire, has launched a war on Internet gambling, setting up a website, producing a Web ad that calls Internet gaming "one of the worst ... [ideas] in the history of bad ideas," and pushing his message in media interviews and Op-Eds. With deep pockets and back-channel access to senior GOP leaders, Adelson is quickly making himself the biggest enemy of people who want to play poker online and states that want the tax revenue from legalizing it.
Internet gambling right now exists in a bit of gray area, effectively illegal on the federal level but recently legalized in some states, including Nevada and Delaware. New Jersey followed in February and the nation's first legal online poker site launched in April, serving Nevada residents exclusively. A number of other states are moving quickly to be next and two bills will soon be introduced in Congress to change federal regulation. The online poker train seems unstoppable, but Adelson has planted himself astride the tracks and is determined to derail it.
One reason the casino mogul might fight online gaming is easy to see -- it's a threat to his casinos. Adelson denies this is his motivation, writing in Forbes that online gaming's "impact on my company’s business would be limited." His motivations are purely moral, he says, based on his experience as a father of two teenage boys. "It’s a threat to our society -- a toxin which all good people ought to resist," he wrote.
But not everyone is convinced. Online poker players are outraged by his opposition, and some are calling for a boycott of Adelson's Venetian casino starting later this month.
"I don't know his motivations," John Pappas, the executive director of the pro-online gaming Poker Players Alliance, which has not joined the boycott, told Salon. "But there are only two kinds of groups right now that are completely against Internet gaming: Sheldon Adelson and groups like Focus on the Family." Even the National Council on Problem Gambling is OK with online gaming, as long as it's strictly regulated, Pappas noted.
"The anti-gambling contingent is really pure in their motivations," Pappas continued. "Not only do they oppose Internet gambling, but they probably oppose Mr. Adelson's brick and mortar casinos too. Adelson has kind of picked and chosen what kind of gambling he's going to oppose."
Later in Adelson's Forbes Op-Ed, he acknowledges that "the rise of Internet gaming has clearly come at the cost of land-based casinos in Europe." Adelson's Las Vegas Sands, after making a fortune in Asia over the past two decades, is now staking its future on building "EuroVegas" outside Madrid in Spain.
And the casino mogul didn't always have such puritanical opposition to online poker. In 2001, the Las Vegas Sun reported that Adelson was "pleased" the Nevada state Legislature was taking a lead on Internet gaming, adding that the Sands was poised to be "a big player in cyberspace if and when Internet gambling is legalized," the paper reported. "Our hat will be in that ring," Adelson said
He even spoke to other casino operators' reluctance to accept online gaming. "When the industry first fought Atlantic City, I felt that a rising tide would raise all boats and we [Las Vegas] would get our share," Adelson told the Sun, explaining that cyberspace would be no different.
And Mark Blandford, who founded the U.K. online gaming site Sportingbet and has been in the industry since the late 1990s, hit back at Adelson by pointing out that the mogul made a plaintive stab at online gaming in the early 2000s. In 2003, a company Adelson controlled was granted an online gaming licence by the gambling commission of a British Channel Island government that hosts many online gaming sites. "An Internet gaming license in Alderney provides Venetian Interactive with some of the highest regulatory standards and controls in the industry, which supports our goal of providing a user-friendly gaming," said Richard Depew, CEO of Venetian Interactive, a subsidiary of Las Vegas Sands. But the company never really took off.
"I regard it as naked self-interest. I think he's fearful of anything that he sees as being a threat to his revenues, and that includes the Internet," Blandford told Salon of Adelson's opposition. "Adelson has tried to look like a modern day King Canute while wiping the history of Venetian Interactive," he said, referring to the Viking king of England who legendarily tried to hold back the tides.
Ironically, it's now Adelson who stands alone among his competitors in opposition to online poker, as most of the other casino operators have abandoned their opposition and are now adapting to the times. The American Gaming Association, the industry's lobby organization, used to oppose online gambling, then went neutral, and now supports federal legislation to legalize online gambling.
Adelson hasn't said if he'll spend big money fighting the rising tide of online poker, but such vocal opposition from someone who dropped $150 million on the 2012 election has to worry some pro-gaming politicians, especially those with national ambitions like Chris Christie, who pushed New Jersey's online poker rule into law.
“I don’t reward or punish politicians,” Adelson said when asked about it in a recent interview on Bloomberg TV. “It’s not my job. I’m only one vote, plus that of my family. I do support a lot of politicians, but I do so because of their ideology and the sharing of values with me.”
Last year, a gaming lobbyist told the Las Vegas Sun that online gaming wasn't the casino mogul's top goal. His first priority was stopping President Obama from getting reelected, and his second was making the Senate flip to Republican control. Both of those agenda items are now moot.
Advocates of online poker say all of Adelson's arguments about why online gaming is worse than casino play -- minors may access it, it lowers the burden of play and is thus more addictive, for instance -- have been asked and answered by effective regulation. "Adelson’s concerns are more than a decade old," Casino City Times columnist Howard Stutz wrote. "Technologies, such as age verification, geo-location, and other safeguards have been approved by independent testing laboratories and Nevada gaming regulators."
Pappas of the Poker Player's alliance says because everything is tracked in real time, online play can actually be better controlled than face-to-face gaming: "It's really a regulator's dream." He pointed to a Harvard study that found that regulating Internet gaming is safer than trying to ban it entirely, which is impossible anyway since people will always find a way to flout prohibitions.
"We thought your love of freedom was why you left the Democrats and joined the Republicans," Nicholas Kisberg, the CEO of the online poker forum CardsChat.com, wrote in an open letter to Adelson. "That's the beauty of gambling online. It gives you the power to choose."
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