Commentary Magazine


Topic: Internet gambling

Addiction, Not Adelson, Is the Issue with Online Gambling

In the last 30 years, legal gambling has become a staple of American society. Desperate for new revenue, states have embraced casinos as panaceas that can balance their budgets and boost their economies. Inevitably, that has now led to a campaign to allow legalized gambling on the Internet. Last month, New Jersey became the third state after Nevada and Delaware to allow online gambling. Not content with that, the American Gaming Association (AGA) has formed a group called the Coalition for Consumer and Online Protection that is buying ads in the Washington D.C. and Nevada markets to try and stop efforts to pass a federal online gambling ban. The deceptively named group will be fronted by a pair of former members of Congress (Republican Mary Bono and Democrat Mike Oxley) and will be advised by top Obama campaign operative Jim Messina. Its purpose is to blunt the efforts of Sheldon Adelson, the casino guru whose crusade against Internet gambling is rattling the industry in which he made his considerable fortune.

The AGA is rightly worried about Adelson’s pledge to spend whatever it takes to stop what he describes as a scourge that will victimize the poor in a way that brick-and-mortar destination casinos can’t. With an estimated $37 billion net worth, Adelson obviously has the wherewithal to help promote the effort to stop online gaming. As I first wrote last November, Adelson has formed his own non-profit group, also fronted by a bipartisan trio of retired politicians. But his opponents have an edge that could more than make up for any potential shortfalls in money: the implacable hostility of the mainstream press to Adelson. The casino owner became famous not so much because of his money but due to his willingness to use it to back Republicans as well as Israeli and Jewish causes. That has made him a perpetual target for the liberal media and the feature published today in Politico Magazine entitled “Sheldon Adelson’s Internet Jihad: The world’s orneriest casino mogul is trying to stop online gaming. Why?” is an example of what he can expect to face as the issue heats up. Though his interest in the subject appears to be both sincere and principled, it won’t be surprising if Messina and his friends in the Obama-friendly media try to make the discussion about the issue more about Adelson than the merits of legalizing online gambling.

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In the last 30 years, legal gambling has become a staple of American society. Desperate for new revenue, states have embraced casinos as panaceas that can balance their budgets and boost their economies. Inevitably, that has now led to a campaign to allow legalized gambling on the Internet. Last month, New Jersey became the third state after Nevada and Delaware to allow online gambling. Not content with that, the American Gaming Association (AGA) has formed a group called the Coalition for Consumer and Online Protection that is buying ads in the Washington D.C. and Nevada markets to try and stop efforts to pass a federal online gambling ban. The deceptively named group will be fronted by a pair of former members of Congress (Republican Mary Bono and Democrat Mike Oxley) and will be advised by top Obama campaign operative Jim Messina. Its purpose is to blunt the efforts of Sheldon Adelson, the casino guru whose crusade against Internet gambling is rattling the industry in which he made his considerable fortune.

The AGA is rightly worried about Adelson’s pledge to spend whatever it takes to stop what he describes as a scourge that will victimize the poor in a way that brick-and-mortar destination casinos can’t. With an estimated $37 billion net worth, Adelson obviously has the wherewithal to help promote the effort to stop online gaming. As I first wrote last November, Adelson has formed his own non-profit group, also fronted by a bipartisan trio of retired politicians. But his opponents have an edge that could more than make up for any potential shortfalls in money: the implacable hostility of the mainstream press to Adelson. The casino owner became famous not so much because of his money but due to his willingness to use it to back Republicans as well as Israeli and Jewish causes. That has made him a perpetual target for the liberal media and the feature published today in Politico Magazine entitled “Sheldon Adelson’s Internet Jihad: The world’s orneriest casino mogul is trying to stop online gaming. Why?” is an example of what he can expect to face as the issue heats up. Though his interest in the subject appears to be both sincere and principled, it won’t be surprising if Messina and his friends in the Obama-friendly media try to make the discussion about the issue more about Adelson than the merits of legalizing online gambling.

The Politico piece by veteran Nevada journalist Jon Ralston isn’t as bad as the skewed headline. In it, we learn more about Adelson’s strong feelings about the issue and the way the rivalry between him and his competitors in the gaming industry have spilled over into this effort. But the piece is driven in large measure by the desire of the AGA to label any efforts to stop their drive to make Internet gambling legal in all 50 states as more a matter of pique on the part of a public figure who has already been roundly bashed in public forums for years because of his support for the GOP and Israel.

But as juicy as all the backbiting about Adelson and his foes may be, the outcome of this debate should not be driven by opinions about the 80-year-old billionaire’s personality or his politics. The problems with Internet gaming are every bit as ominous as Adelson describes.

Personally, I’m no fan of the gaming industry or of casinos. But he is right to draw a broad distinction between resorts, such as those owned by the mogul in Las Vegas, Macao, China, and elsewhere and a scheme that would legalize gambling operations that would be accessible by computer, tablets, and phones in virtually every home in the nation. Going to a casino involves some degree of planning and is usually done as part of a vacation where it is assumed the individual will spend money on entertainment. Though legalized gambling in resorts, Indian reservations, and the casinos that have sprouted in cities and towns throughout the country have increased the incidence of gambling addiction as well as other social pathologies that usually accompany such business, that toll will pale in comparison to what will happen once every American with a smart phone is only a click away from online games that will empty their bank accounts and ruin their families.

Even more worrisome is the obvious danger that children who now routinely have access to phones and other devices that can access the legalized state ventures will be drawn into the world of gambling. There is a broad consensus in favor of restricting access to dangerous products such as alcohol and tobacco. A nation that banned “Joe Camel” must also understand that there will be no way to stop children from being hooked on gambling at increasingly early ages if online gaming is legalized everywhere.

To such arguments, industry proponents have no good answers. They tell us that stopping online gaming is futile and that the genie can’t be put back in the bottle and that we’ll all be better off if the federal government gets involved and lets the states take their cut from the business just as they do from casinos. Allowing this measure to go forward is good for those who have invested in such ventures as well as helpful to state governments, such as Chris Christie’s New Jersey, which hopes to eventually rake in as much money from Internet gamblers as its does from those who make the trek to Atlantic City. But anyone who has listened to the radio ads for New Jersey’s new Internet gambling business understands that what is going on is the worst kind of exploitation.

As Politico notes, the lure of gambling for both potential addicts and the entrepreneurs and governments that stand to profit from online games may be too great for Adelson’s effort to prevail. A 2011 decision of the Justice Department to overturn a previous ban has opened the floodgates that may never be closed. But he deserves credit for drawing attention to this scourge and for using his considerable political influence to try and halt the drive to make this addiction more accessible. This issue cuts across the usual partisan lines since liberals who are concerned about the way gambling singles out the poor and conservatives who claim to care about communal values should join Adelson’s effort. Though his critics continually seek to portray Adelson as self-interested, the casino mogul has been consistent about putting his money where his mouth is even if it does nothing to advance his businesses. Even those who don’t like his politics should be joining him to halt a movement that will do tremendous damage if Congress does not stop it.

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Adelson’s Internet Gambling Crusade

At first glance, there’s little doubt that most of the people who love to hate Sheldon Adelson are going to assume that he’s in it strictly for the money or to pursue some conservative agenda. But the more you look at it, the casino mogul’s new cause is not one that seems to directly advance either his financial interests or the political or Jewish causes that are close to his heart. Thus, the news reported first last week by the Washington Post that Adelson is going all in on an effort to ban Internet gambling is puzzling his chorus of detractors as well as some of his usual allies. Indeed, most in the gaming industry oppose his efforts, as do many Republicans like New Jersey Governor Chris Christie who might otherwise look to him for support. But Adelson, who is launching the Coalition to Stop Internet Gambling and prepared to back it with his $20-plus billion personal fortune, is convinced that he can change the nation’s mind about the topic. As Forbes notes, Adelson’s initiative comes at a time when:

For the first time most of the U.S gambling interests—from the casinos to the horse track owners, state lotteries and Native American tribes, appear to be starting to coalesce around a pro-online gambling position. Adelson’s effort will likely rip apart the American Gaming Association, the casino industry’s lobbying group in Washington.

With online gambling now legal in Nevada, Delaware, and in New Jersey (as of today) and with 12 states set to consider it in the near future, the odds against Adelson’s initiative are long. But whether he is able to stop or even slow down the race of state governments to cash in on what they believe will be a windfall, the billionaire happens to be in the right. The spread of gambling on personal computers and smart phones will not only harm his industry but cause untold societal damage, especially to the poor.

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At first glance, there’s little doubt that most of the people who love to hate Sheldon Adelson are going to assume that he’s in it strictly for the money or to pursue some conservative agenda. But the more you look at it, the casino mogul’s new cause is not one that seems to directly advance either his financial interests or the political or Jewish causes that are close to his heart. Thus, the news reported first last week by the Washington Post that Adelson is going all in on an effort to ban Internet gambling is puzzling his chorus of detractors as well as some of his usual allies. Indeed, most in the gaming industry oppose his efforts, as do many Republicans like New Jersey Governor Chris Christie who might otherwise look to him for support. But Adelson, who is launching the Coalition to Stop Internet Gambling and prepared to back it with his $20-plus billion personal fortune, is convinced that he can change the nation’s mind about the topic. As Forbes notes, Adelson’s initiative comes at a time when:

For the first time most of the U.S gambling interests—from the casinos to the horse track owners, state lotteries and Native American tribes, appear to be starting to coalesce around a pro-online gambling position. Adelson’s effort will likely rip apart the American Gaming Association, the casino industry’s lobbying group in Washington.

With online gambling now legal in Nevada, Delaware, and in New Jersey (as of today) and with 12 states set to consider it in the near future, the odds against Adelson’s initiative are long. But whether he is able to stop or even slow down the race of state governments to cash in on what they believe will be a windfall, the billionaire happens to be in the right. The spread of gambling on personal computers and smart phones will not only harm his industry but cause untold societal damage, especially to the poor.

Internet gambling was deemed illegal by the federal government up until an opinion handed down in 2011 by the Justice Department made it possible. That led both most casinos and other potential gambling venues to get behind efforts to get the states to legalize such businesses. Politicians like Christie, eager for more revenue to balance their budgets without having to cut more services or to raise taxes, also look at it as a way to obtain free money. They also think it will help bolster gambling havens like Atlantic City that are suffering from the proliferation of legal casinos around the country. They point out that Internet gambling already exists via offshore sites that attempt to skirt the laws and that there is no reason for states not to cash in and take their share. Adelson’s numerous opponents also point to his own record as a casino owner and his onetime interest in Internet gambling as proof that his moral concerns are hypocritical.

But whether he is tilting against windmills or not, Adelson is right to try and facilitate a debate about the social costs of this trend before it is too late.

Gambling, whether at destination resorts like the ones Adelson owns in Las Vegas and Macao, or via state lotteries, is generally depicted in the media—and in the flood of advertisements perpetually seeking to entice people to gamble—as entertainment with no down sides for society. It is that for many Americans, but we don’t hear enough about how this supposedly harmless vice destroys countless families and lives. Wherever legal gambling flourishes, it generates a lot of work for bankruptcy lawyers and sets off waves of crime as debt-ridden gamblers resort to thievery and embezzlement. Every conceivable social pathology comes in its wake and though governments profit at one end with their large take of the cut, they pay for it in many other ways that have to do with the damage done to those destroyed by gambling.

The odds of winning in state lotteries are so astronomical that they are in effect a tax on stupidity. They would be considered scams were anyone but the government operating them. But the low cost of tickets makes it harder for gambling addicts to ruin themselves with it. Similarly, however great the toll of suffering due to legal casinos may be, its impact is limited by the fact that going to such a place is not an impulse decision but rather a planned excursion.

But once high-stakes gambling becomes something you can play on your phone, the stakes for society will increase exponentially. Scoff at sermons about the evils of gambling preached by a casino owner all you like. But Adelson’s right that once this spreads across the country, it will sink the nation in a new wave of addiction whose costs will be incalculable.

So far, Adelson’s group, which is being fronted by a bipartisan trio of retired politicians—Republican former New York Governor George Pataki, former Democratic Senator Blanche Lincoln of Arkansas, and former Denver Mayor Wellington Webb—has been met with skepticism as was evident when the three were grilled this morning by Chuck Todd on his MSNBC program. Trying to convince Americans that more legal gambling is wrong—a proposition that might have appealed to previous generations—may be like trying to put the genie back in the bottle. But unlike casinos and state lotteries which are off limits for kids, Internet gambling will also likely victimize children who have access to smart phones with little assurance that regulations will make this impossible. As such, Adelson’s group may be right to say that this could be like the “Joe Camel” moment when the nation turned on cigarette advertising because of the way it exploited children and created lifetime addictions.

Liberals who care about the way gambling singles out the poor ought to be on his side. So, too, should conservatives who claim to care about communal values as well as those who understand that the answer to the question of how to finance big government should be found in lower expenditures, not soaking middle-class and poor gambling addicts.

With many Republicans and most of the gaming industry against him, it’s not clear that all the money in Adelson’s deep pockets will be enough to prevent more states from following New Jersey’s example. Nor are the odds in favor of his attempt to get federal legislation to close the legal Internet gambling sites down. But even if all he’s able to do is to raise awareness of the grievous social costs of this scourge, it will have been worth it. I doubt that this will improve his image in a mainstream media that despises Adelson for his support for conservatives and deprecates his backing for Israel’s Likud government. But whatever you may think of his politics, Adelson’s stand deserves respect and support.

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