Commentary Magazine


Topic: gambling

Christie’s Gambling Double-Down and 2016

New Jersey Governor Chris Christie was in Mexico last week on a trip that was aimed at improving his foreign-policy credentials but undermined his reputation for frankness by refusing to talk about immigration while south of the border. But upon his return he did even more damage to his prospects for 2016 by announcing a decision to allow Atlantic City casinos and New Jersey racetracks to allow betting on sports. In doing so, the governor not only doubled down on a failed bet that gambling revenue will save the state but also gave more ammunition to opponents who are already convinced that he is not a conservative.

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New Jersey Governor Chris Christie was in Mexico last week on a trip that was aimed at improving his foreign-policy credentials but undermined his reputation for frankness by refusing to talk about immigration while south of the border. But upon his return he did even more damage to his prospects for 2016 by announcing a decision to allow Atlantic City casinos and New Jersey racetracks to allow betting on sports. In doing so, the governor not only doubled down on a failed bet that gambling revenue will save the state but also gave more ammunition to opponents who are already convinced that he is not a conservative.

Christie earned his reputation as a straight talker largely because he was willing to confront municipal unions and refused to continue to fund a Hudson River tunnel project that the state couldn’t afford. But his strong support for an increased reliance on gambling to revive a faltering Atlantic City economy did not get the same national attention. But instead of helping bring the resort back, the massive investment on the part of the state in gambling did nothing to save businesses that were already doomed. The closing of two large casinos in the resort at the end of the summer season was a severe blow to Christie’s policy. The collapse of the new Revel casino was a particular embarrassment since, as Breibart.com noted when its demise was announced, Christie had put $260 million in state tax rebates in the scheme to build it.

The collapse of the $2 billion project on Christie’s watch cannot be entirely blamed on the governor but he does bear responsibility for the state’s role in the mess. Nor was that the only government connection. The New Jersey state pension board invested another $300 million in a hedge fund with a stake in the casino.

But the problem here isn’t just the gloomy business environment in the shore resort. It’s that rather than honestly facing the city’s problems and seeking a diversification of investment that might give the place a chance, Christie insisted on pouring more money into gambling at a time when there was already ample reason to believe Atlantic City’s time as a gambling boom town was over. With neighboring states like Pennsylvania building their own resorts as well as competition from Indian reservations, Christie’s foolish investment in even more gambling was never going to work. But, as savvy state political observers noted, it was popular with unions that stood to gain jobs in the short term from the investments.

Yet even if we are prepared to give Christie a pass for his mistake in betting on gambling in the past, his latest gambit—legal sports betting—shows him and New Jersey to be hopelessly addicted to gambling revenue.

Christie, who is joined in support for sports gambling by some state Democrats, thinks allowing betting on major sports is the ticket to save an industry that is over-saturated in the region. Given the massive amounts of illegal betting on sports, especially football, the notion of allowing the state to get a share of that bonanza makes some sense. But, as was already amply proven over the last 30 years, Atlantic City is not Las Vegas. What works in the latter may not prove profitable in the former. Moreover, the major sports leagues have already tied up the state’s efforts to get in on the action in court. That’s why Christie’s announcement that the state would not prosecute casinos and racetracks that allowed sports betting caught these operations by surprise since they know any money spent on this may be a sunk cost if the courts rule against them.

Just as important for Christie, if he persists in this policy it will mean that his battles with some of the most popular sports businesses in the nation will be going on when he is presumably planning to run for president. The idea of campaigning in states where he needs the support of evangelicals and conservatives while putting the weight of his state behind efforts to expand gambling will make it even harder for him to pretend that he is someone who shares the values or the interests of core Republican voters. The leagues will argue, with some justice, that what Christie is doing would put the integrity of America’s most beloved pastimes in jeopardy. That he will be pursuing that crusade merely in order to pay for New Jersey’s government rather than seeking to trim it will also not play well in GOP primaries.

Christie may believe that Bridgegate won’t hurt him and that he can fake his way through foreign-policy questions that betray his lack of experience as well as his paucity of knowledge about such questions. But his gambling dependence problem is not something that can be wished away in a conservative primary. In a field where he may face candidates who have better conservative credentials, a betting habit won’t help Christie close the sale with Republicans.

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No Surprise: Adelson in the Cross Hairs

Those with wealth have to know media and government scrutiny comes with their money. And if such persons choose to involve themselves in politics, then that scrutiny is bound to be even greater. Sheldon Adelson, the billionaire supporter of Jewish philanthropies and Republican political candidates, probably understood this long before he became the subject of so much attention this year. But the focus on Adelson today makes it more clear than ever that the controversial campaign donor’s willingness to put himself in the spotlight means his business dealings are going to be gone over with a fine tooth comb by both the media and federal authorities as they search for something with which to hang him.

Adelson is the subject of a lengthy investigative piece that appears on the front page of today’s New York Times. According to the story, a former “front man” in China for the casino mogul’s Las Vegas Sands Corporation is being investigated about funds that may have been used to bribe foreign officials in connection with the company’s efforts to expand their business there. If true, that would violate U.S. laws that forbid such shenanigans. It’s a messy and complicated tale that has drawn the attention of Chinese authorities, the Justice Department and the Securities and Exchange Commission as well as the Times and the Wall Street Journal. But it is far from clear that Adelson has violated any law or done anything that any other big business–which chooses to operate in a country where corruption is rife and the rule of law is a hazy concept–hasn’t done. It may well be that anyone whose prosperity is derived from gambling is going to be subjected to such investigations. But the idea that he has mixed “politics and profits” as the Times put it, seems to imply there is something not kosher about him even if no wrongdoing can be proved. That leaves cynical observers wondering whether the outrage about Adelson’s dealings would be quite so acute if he were not a leading backer of conservative and Israeli causes.

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Those with wealth have to know media and government scrutiny comes with their money. And if such persons choose to involve themselves in politics, then that scrutiny is bound to be even greater. Sheldon Adelson, the billionaire supporter of Jewish philanthropies and Republican political candidates, probably understood this long before he became the subject of so much attention this year. But the focus on Adelson today makes it more clear than ever that the controversial campaign donor’s willingness to put himself in the spotlight means his business dealings are going to be gone over with a fine tooth comb by both the media and federal authorities as they search for something with which to hang him.

Adelson is the subject of a lengthy investigative piece that appears on the front page of today’s New York Times. According to the story, a former “front man” in China for the casino mogul’s Las Vegas Sands Corporation is being investigated about funds that may have been used to bribe foreign officials in connection with the company’s efforts to expand their business there. If true, that would violate U.S. laws that forbid such shenanigans. It’s a messy and complicated tale that has drawn the attention of Chinese authorities, the Justice Department and the Securities and Exchange Commission as well as the Times and the Wall Street Journal. But it is far from clear that Adelson has violated any law or done anything that any other big business–which chooses to operate in a country where corruption is rife and the rule of law is a hazy concept–hasn’t done. It may well be that anyone whose prosperity is derived from gambling is going to be subjected to such investigations. But the idea that he has mixed “politics and profits” as the Times put it, seems to imply there is something not kosher about him even if no wrongdoing can be proved. That leaves cynical observers wondering whether the outrage about Adelson’s dealings would be quite so acute if he were not a leading backer of conservative and Israeli causes.

The assumption underlying these investigations is that Adelson’s successful efforts to open gambling casinos in Macao as well as his unsuccessful attempt to do business in mainline China itself had to be crooked or at least the result of some sort of bribery. Given the level of corruption in China, a country that combines authoritarian communist politics with wild and woolly capitalism, it’s difficult to assert that any business dealings there, especially concerning gambling, were pristine. But a close reading of both the Times investigation as well as the one conducted by the Journal, shows the case is more about such assumptions than any actual proof of law-breaking by Adelson.

The most damning piece of evidence about Adelson in the Times feature isn’t new. It’s the oft-told story of how Adelson used his access to former House Majority Leader Tom DeLay to convince him to shelve a congressional resolution opposing the holding of the 2008 Olympics in Beijing in order to please his Chinese interlocutors. That wasn’t to the credit of either Adelson or DeLay, but it wasn’t illegal. Given the fact that virtually the entire American political establishment — including those with no ties to the casino owner — made a conscious decision a decade or more ago to treat the issue of Chinese human rights violations as a minor obstacle to better relations with Beijing that was best ignored, it’s difficult to get too worked up about Adelson’s minor role in this shift.

Nor is it easy to manufacture outrage about corruption in Macao or China. The practice of hiring local fixers called guanxi to smooth the path of foreign businessman there is well-known. The line between the apparently common practice of paying such people sums of money to gain government permission to operate in the country and bribery may be so thin as to be almost non-existent.

Nevertheless, Adelson’s company is going to be given a thorough going over by U.S. authorities. Sands is cooperating with the government, and if they are penalized or prosecuted, the legal process will be long and as complicated as the investigation. We can only hope justice will be done one way or another.

But all one has to do is to read many of the hundreds of comments posted by readers in response to the Times article to understand that any public anger about Adelson has more to do with his public identity as an unashamed backer of Israel and Jewish causes and his support for Republican candidates. The anti-Semitic nature of these comments is repulsive. No matter what you think of gambling or even Adelson’s politics, the prime motivation for those who claim to support further investigation of Sands’ activities in China seems to be to discredit anyone who has the chutzpah to use his wealth to bolster Israel or conservative politics. The bottom line here is that while we cannot know the ultimate outcome of this investigation, the one thing Adelson is definitely guilty of is using his money to promote ideas the left despises.

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