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October 20, 2014

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Politics:

In D.C. hearing, Adelson deputy rails against online gaming

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Christopher DeVargas

Las Vegas Sands CEO and Chairman Sheldon Adelson, shown in this April 26, 2012, file photo, is backing a Republican group trying to persuade Jewish voters in battleground states to support presidential candidate Mitt Romney.

Congress got a taste of what Sheldon Adelson’s new campaign against Internet gambling may look like Tuesday, when one of the Las Vegas Sands CEO's top deputies appeared before members of the House Energy and Commerce Committee to call for a clampdown on online betting.

“This is our Joe Camel moment. … It could very well be the demise of our industry,” Las Vegas Sands Vice President of Government Affairs Andrew Abboud told the panel, calling on lawmakers to reinstate an understanding of the Wire Act that would bar financial transactions for gaming online. “We just think turning every device into a casino takes gambling too far.”

But members of the committee — even some of those predisposed to agree with Abboud’s concerns about the addictive potential of Internet gaming — were not about to give Abboud the chance to occupy the moral high ground.

“In the Venetian at the sports book, you can wager from anywhere in Nevada,” Rep. Joe Barton, R-Texas, said, pointing out a Sands advertising campaign for mobile betting. “What you’re advertising here is the same thing that we’re talking about … except for the geography.”

Barton is the author of the only bill pending in Congress right now to legalize online poker only — an important distinction, he says, because “poker is a game of skill.”

In one exchange, Abboud seemed to suggest he understood — and even agreed with — that point of view.

“It’s fine if people want to play poker online … but it’s about this: Slot machines, 'Iron Man, kiddie comics — this stuff is not what we’re about,” Abboud said, showing documents depicting the more predatory forms of Internet gaming that might follow poker. “That’s where the industry is going to go.”

One reason, Abboud suggested, is because “poker is not a sustainable market” by itself. Even if some site operators were able to stick to a poker-only model, he argued, the temptation to pass state laws to get into other forms of online gambling, as well as avenues open to nefarious site operators to push boundaries if gaming is legalized, would create a system too difficult to regulate and control.

“The thought of a 50-state solution is scary. … When the Wire Act was overturned, that’s not the day the Internet became safe,” Abboud said. “Don’t make a race to the bottom of the marketplace; restore the Wire Act and protect American consumers.”

But other panelists charged Abboud’s argument was tantamount to asking Congress to bury its collective head in the sand.

“This misguided approach would only serve to harm the most vulnerable populations that regulation would be trying to protect,” said John Pappas, executive director of the Poker Players Alliance, which has spent considerable effort lobbying for Barton’s bill. Pappas noted that in Nevada, there has not been a single reported incident of underage gambling since the state legalized poker online.

“Fixing the Wire Act does nothing to change the desire to game,” said Geoff Freeman, president and CEO of the American Gaming Association, which supports the federal legalization and regulation of Internet poker. “We have a moral and a business incentive for the industry to do this in its proper regulated manner.”

Tuesday’s committee meeting gave Freeman, Abboud, Pappas and others an opportunity to air their disagreements, but it is unclear whether the hearing is a step toward congressional votes on an online poker bill. Activity in the Senate on the issue has been effectively nil since 2012, and although there is a House subcommittee meeting on the subject every few months, there are no signs that leadership plans to schedule a vote soon.

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