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Kevin Smith

Mandalay Pulls out of AGA

2 April 2002

Unable to reach a compromise on how to approach Internet gambling and a host of other issues, officials with Mandalay Resort Group has withdrawn its membership to the American Gaming Association, the American casino industry's top lobbying group.

A Mandalay Resort official confirmed to IGN that the AGA's stance on Internet gaming differed from his company's approach, but the head of the AGA said he was left in the dark as to why Mandalay was severing ties.

"Normally if you are unhappy with someone you would pick up the phone and let them know, but we got nothing from them."
- Frank Fahrenkopf
American Gaming Association

Frank Fahrenkopf, the chief executive of the AGA, said the association was informed of Mandalay's decision via a letter, which, he said, didn't name a specific reason for its withdrawal.

The decision caught him by surprise.

"There was no warning," he said. "Normally if you are unhappy with someone you would pick up the phone and let them know, but we got nothing from them."

Fahrenkopf said it is no secret that Mandalay has been outspoken toward the land-based gaming industry's recent warming up to online gaming.

The AGA recently said it would actively lobby against the Goodlatte Bill, a House bill aimed at updating the Federal Wire Act to prohibit online gaming and sports betting. The group opposes the legislation because it would allow legalized online betting on horseracing.

The AGA hasn't determined whether it will support a competing bill that aims to outlaw online gaming by targeting banking instruments.

Beyond the AGA's stance on legislative issues, Fahrenkopf speculated that the association might have been caught in the middle of a corporate feud between two of its members. He didn't comment on specifics, but confirmed that media reports insinuating tension between Mandalay and MGM Mirage are accurate.

The association's stance on the Goodlatte bill bodes well for MGM Mirage, which has been awarded an online casino license in the Isle of Man and has disclosed intentions of launching a virtual casino.

Fahrenkopf pointed out, however, that Glenn Schaefer, a top-level executive for Mandalay Bay, sat on the association's executive committee, which made the decision to oppose the Goodlatte bill.

"All positions taken on all issues are approved by the executive committee and by the board," he said. "Our current position concerning the Goodlatte bill was approved by our board and our executive committee."

John Marz, Mandalay's senior vice president of marketing, confirmed to IGN that the Internet issue was one of many differences the two parties couldn't compromise on.

"The Internet issue is an issue that we differ on," he said. "I don't want to get into an issue by issue basis, just suffice it to say that the Internet was just one of the issues. There were other issues that we didn't see eye-to-eye on, but there are other issues that we do."

Mandalay said it will continue to support the AGA, but only on a case-by-case situation.

Fahrenkopf, meanwhile, said the AGA was preparing a reply letter requesting clarification of which AGA positions Mandalay supports and which ones it opposes.

"We need to figure out what they will support and what they won't support," he said. "Then we can determine where we can go with them."

Indian gaming, Internet bills and NCAA betting bills are just some of the issues the AGA is currently addressing. Marz said Mandalay will support the AGA in opposing a ban on NCAA sports betting.

MGM Mirage Senior Vice President Alan Feldman told the Las Vegas Sun he was disappointed in Mandalay's decision.

"I think it's important for the industry to be united, even when we disagree," he said. "When our point of view was different from other companies, we didn't bolt the organization. That's not the way to respond to those kind of things."

Even though Mandalay opposes online gaming, Marz said he wasn't sure whether Mandalay would actively lobby for legislative efforts to prohibit gambling on the Internet.

Mandalay Pulls out of AGA is republished from
Kevin Smith
Kevin Smith