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March 31, 2014

Will Congress Ban Internet Gaming in New Jersey?

Avatar March 31, 2014

Legislation to eliminate internet gaming was introduced to the senate and house on March 26 from members of the Democrat but mostly Republican parties.  These measures are aimed at reversing a 2011 decision by Attorney General Eric Holder that the 1961 Wire Act law used in recent years to control internet gaming is only exclusive to sports betting. Currently on the table in congress is for a reversal of this reinterpretation of the act to include internet gaming to be banned once more.

Adelson’s Power

Sheldon Adelson, the billionaire Sands casino mogul is backing this fight against on-line gaming in congress.  He has already said “I am willing to spend whatever it takes” against internet gaming. Based upon his previous record of financial contributions, Adelson will be more than apt at providing the funds to fuel the fire against internet gambling. The billionaire casino mogul spent over $92 million on losing GOP presidential candidates in 2012 but is savvier to backing more winnable candidates in the future. So far in 2014, Adelson and his wife have donated $181,000 to Republican candidates and party committees.

adelson

Adelson is supporting senators, Lindsey Graham (R-S.C.) and Rep. Jason Chaffetz (R-Utah) in their upcoming proposals in the house and senate against Internet Gaming to include the Internet Gambling Control Act of 2014. This includes Graham’s introduction of the bill in the senate that would reinstall the previous 2011 interpretation of the Wire Act that would ban internet gaming nationwide rather than letting the individual states decide.  Graham is continuing to look for support and finding it from Sen. Dianne Feinstein D-CA , who is against the initiative in her own state for internet gaming. Feinstein is a key contributor because she is such a well-known Democrat siding on a cause backed by major Republican contributor, Andelson. Besides Senator Feinstein, the only other support comes from Sen. Mike Lee (R-Utah) and Sen. Kelly Ayotte (R-N.H.). Information about this bipartisan effort was included in a recent Press Release from Senator Graham.

On the same day these bills were introduced in the house and senate, the Democratic Governors Association released a statement disapproving of any form of government prohibition of internet gambling. Governors from states with lotteries would be concerned with anything controlling internet gaming because of the growing trend of being able to purchase lottery tickets over the internet.

Adelson’s Opponents

Senate Majority Leader Harry Reid, D-Nev., is a supporter of on-line gaming, specifically on line poker and being the Senate Majority Leader in the gambling state makes him the biggest opposition to the bill. Reid is waiting to see what the bill looks like first before taking the first step against the legislation or towards amending it. “The best solution for Nevada is to allow internet poker”, Reid said.  “A significant expansion of gaming that would bring slot machines to every computer at home in America is bad for Nevada and bad for the country”, Reid also said.

Senator Dean Heller, R-Nev., is on the same page as Reid on the issue of keeping on-line gaming legal, though they’re in disagreement as to how get an on-line gaming bill through Congress. Heller wants the states to decide what is good for them and isn’t for a nationwide push.

Hidden Motives

What is Sheldon Adelson’s motivation for stopping online gaming? He says that younger gamblers will be vulnerable and that the online gaming industry cannot effectively stop minors from gamblers. Pointing out how off shore gambling still exists and the hypocrisy of the internet gaming industry saying it can prevent problem gambling. Adelson also believes that on-line gaming will hurt the land-based casinos in the long run and create a cannibalization of interests basing this assumption on certain jurisdictions in Europe. Ultimately, Adelson thinks it would be social media giants, like Facebook that would have the capacity to take out land based casinos completely if internet gaming progresses.  Adelson claims his efforts aren’t serving his own interests solely but also the gaming industry’s interests as a whole.

An interesting side plot is Adelson’s recent get together for future Republican Presidential political figures. Four Republican presidential hopefuls descended to Adelson’s Luxury hotel in Las Vegas on March 29th for what is being called the “Sheldon Primary”.  This list includes Ohio Governor John Kasich, Wisconsin Governor Scott Walker, former Florida Governor Jeb Bush and New Jersey Governor Chris Christie. Governor Christie will be an interesting conversation piece since his state has approved internet gaming in New Jersey; how will this sway Sheldon’s support if he runs for President? Would Christie change his position? The topic of internet gaming didn’t come up in candidate speeches but Adelson has said his most pressing issue is with U.S. support for Israel. Each candidate did get one-on-one-time with Adelson and addressed the Republican Jewish Coalition, an advocacy group of which Adelson is a board member and benefactor.

The reinvigorated debate about internet gaming will continue but its momentum will be diminished because of another election year approaching. Most political experts agree that a Federal Bill banning online gaming is unlikely to pass. However, if compromises are sought, where will the line be drawn? It will be interesting to see how far these bills go and how far Mr. Adelson is willing to spend to make this an issue.

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