Top-10 reasons why Sheldon Adelson's anti-online gambling stance is ridiculous

Top 10 reasons Sheldon Adelson's anti-online gambling stance is ridiculous

Yesterday, the Washington Post reported that Sheldon Adelson, chairman and CEO of Las Vegas Sands, is putting together a lobbying effort to urge lawmakers to not only block efforts to regulate the online gambling industry, but to strengthen current federal law and ban the industry.

This isn't exactly surprising. Adelson has been a vocal opponent of the online version of his industry for some time. In June, he penned an Forbes editorial declaring that Internet gambling could bring a "plague" to our society.

You'd think that the CEO of a powerful gaming corporation would have a lot of good reasons to come to a conclusion that prevents the growth of his industry. Unfortunately for Adelson, all the arguments he presents are just plain wrong.

Here are the top-10 things Sheldon Adelson has wrong on Internet gambling.

10. A ban will stop operators
Adelson seems to think that if Congress enacts a ban on Internet gambling, the activity will cease to exist here in the United States. The fact is the passage of the Unlawful Internet Gambling Enforcement Act in 2006 was supposed to do that, but several offshore gambling companies became giants as a result of the market leaders leaving the space. Sure, PokerStars and Full Tilt Poker claimed they were not covered under the law because poker is a game of skill. But the fact is there are plenty of offshore online gambling operators who continue to serve the United States that no responsible legal expert would say are on the right side of the law. Any operator who offers online sports betting is in clear violation of the Wire Act, and online sportsbooks have thrived in the U.S. since the 1990s. Yes, some have been dinged and some executives have been arrested, but there are still 187 online sportsbooks that accept bets from the United States, according to the Online Casino City database. If these folks are willing to skirt the law and face prosecution now, a new law probably isn't going to change that.

9. A ban will stop players
Once again, this is a specious argument. Yes, there are a lot fewer online poker players in the United States in the wake of Black Friday, but the activity hasn't stopped completely. And there are still plenty of folks willing to risk their money on offshore sportsbooks.

8. The people want a ban
There are lots of ways to put together a rigged poll, and Sheldon Adelson used just about every one of them with a poll he put together on the industry. Adelson polled people in just four states (California, Kentucky, Pennsylvania and Virginia). The poll indicated people generally had a more favorable opinion of land-based gaming operations than online operations, with 58 percent of those polled agreeing with the current federal stance.

But agreeing with the federal stance doesn't mean agreeing that states shouldn't have the right to offer online games. It's also important to note that the poll doesn't include the three states that have regulated online games. I'd be interested to know how Nevada residents, who have lived with online poker for the last six months, feel about the online industry.

7. Claims it preys on children, poor and addicted gamblers
Opponents of all types of gambling say that the industry preys on underage bettors, the poor and addicted gamblers. And there are certainly some rogue operators who do take advantage of vulnerable populations with marketing messages that target them. (The same could be said of the lottery; ever hear New York State Lottery's slogan? "All you need is a dollar and a dream.")

But to say that these vulnerable populations are in even more danger because of Internet gambling is just plain false. Studies have shown that Internet gamblers tend to have more education and higher annual incomes than people who gamble in brick-and-mortar casinos. And the security procedures online casinos have in place make it very difficult for underage gamblers to get through. Impossible? No, but it's not impossible for underage gamblers to get into a brick-and-mortar casino, either. (Need proof? Look no further than the Sands' Pennsylvania property, which was just fined $68,000 for underage gambler violations.)

The same percentage of people who play online show problem gambling tendencies as those who gamble in brick-and-mortar casinos. Does the industry need to do a better job preventing these vulnerable populations from gambling above their heads? Yes. But to say that the problem is worse online is to either overstate the problem in the Internet universe, or understate the problem in the brick-and-mortar casino.

6. Our lives are online
This is a generational thing that might be hard for an 80-year-old man to understand, but most people under the age of 40 (and many over that age) live a substantial portion of their lives online. They do their banking online. They do their shopping online. They maintain friendships through online communications. So it's only natural that they would take their gambling pursuits online as well.

Adelson thinks this is a terrible thing for the social fabric. I, however, disagree. Online gambling allows bettors to play for much, much lower stakes. And you can play for awhile without having to travel to the casino to do it, thus allowing you to have more time with your family, while still enjoying the entertainment offered by the gaming industry.

5. The online gambling industry will destroy brick-and-mortar casinos
Online gambling has been regulated in Europe for the better part of a decade. Land-based casinos are still thriving there. The online poker boom in the United States 10 years ago resulted in a resurgence of live poker rooms across the country. There's little to no proof that online gambling costs brick-and-mortar casinos, as Adelson says.

4. Online gambling will cost people their jobs
Even if you buy Adelson's argument that a thriving online industry will cause a loss in jobs in brick-and-mortar casinos (which I don't), those job losses would be offset by gains in the online industry, whether they be IT jobs or customer service jobs. It takes a lot of work to run an effective online casino; it doesn't just happen on its own.

3. Would be unable to stop problem gamblers
Most regulated online casinos already have self-exclusion protection for problem gamblers. And here's the thing about online gambling: All behavior is tracked and easily observable. Say you're a penny slots player who typically sits down at a slot machine with $20 and plays $0.50 a spin. Well, if that account is suddenly playing blackjack for $100 a hand, it's easy to see that something might be up. An online casino can block that account until the operator is able to determine whether the play is fraudulent, or if it's someone displaying problem gambling tendencies. A land-based casino can't track what you're doing every time you sit at a table or a machine (at least not if you don't use a loyalty card), so that sudden change in behavior can go on for some time.

Depending on the regulations in place, problem gamblers will be easier to identify and get help in an online environment than in a brick-and-mortar casino.

2. George Pataki will be a convincing advocate
The Washington Post reports that Adelson has picked former New York State Governor George Pataki to emphasize "law enforcement concerns, including the risks of money laundering and fraud." Of course this is again a specious argument, but nonetheless, Adelson couldn't have picked a more wooden, unconvincing man to do the job.

I lived in New York when Pataki was governor, and I actually thought he did a pretty good job. That's saying something, considering Pataki is a Republican and I'm a pretty liberal person when it comes to politics. But despite being pretty good at governing, he was one of the least inspiring people I've ever seen. I can't imagine him changing anyone's mind on this matter. He's just not that charismatic.

1. His money will actually change something
In 2012, Adelson reportedly spent more than $100 million trying to get Newt Gingrich and later Mitt Romney elected president. It didn't work. And the money he plans to spend lobbying Congress isn't going to do anything to change things in the online gambling industry, either.

If this were all about lobbying money, this issue would have already been decided and we'd already have regulated online gambling in the United States. Gaming corporations have spent millions lobbying Congress over the past 10 years, and none of it has resulted in regulation. Adelson's money may get his perspective a louder voice in the fight, but the reality is that it likely won't change anything, just as it didn't change anything in the 2012 presidential election.