The Billionaire Battle Over Online Gambling in U.S.

Sheldon Adelson is putting his threats to execution and the first video of the awareness campaign against online gambling in the U.S. has just been released. Will there be a retort from some of his equally mighty adversaries?..

Imagine the early Hollywood moguls engaged in a vehement battle over talking movies; Louis B. Mayer lashing out against Samuel Goldwyn, arguing that sound film is a danger to the movie industry, will put bad voice actors out of work, and subject the young, the poor, and the elderly to the dangers of sound, making movies even more enticing and addictive for the helpless viewers who would spend their every waking hour in the movie theaters…

In a sense, it is something of the kind that we are witnessing now with the campaign to ban Internet gambling championed by one of the gambling industry’s own superheroes - self-made billionaire and casino magnate Sheldon Adelson.

“I am willing to spend whatever it takes,” Adelson said and his determination is all the more powerful in view of the fact that he is currently the fifth richest American and the biggest gainer of the year, according to Forbes, thanks largely to his casinos in Macau and Las Vegas.

“My moral standard compels me to speak out on this issue because I am the largest company by far in the industry and I am willing to speak out. I don’t see any compelling reason for the government to allow people to gamble on the Internet and nobody has ever explained except for the two companies whose special interest is going to be served if there is gaming on the Internet, Caesars and MGM.”

As Forbes’ Nathan Vardi put it, ‘He's got lots of chips, but all the other players at the table do, too’. And those players are reportedly none less than Donald Trump, George Soros, Mark Lasry, Leon Black, and John Paulson, to name only a few of the billionaires who are siding with online gambling in the U.S. and are certain to fight back Adelson and his Coalition to Stop Internet Gambling.

One major player whose position on online gambling remains ambivalent is casino billionaire Steve #Wynn. Both camps have been eager to welcome him among their ranks but claims that he has joined Adelson's crusade seem hasty and exaggerated. What is certain is that Wynn Resorts Ltd have gained approval (through a partnership with Ceasars Interactive) for online gambling operations in #NewJersey but have put them on hold. Rather than a moral stand, however, this appears dictated by business considerations - online gaming is apparently 'not a good entrepreneurial opportunity'  at this stage.

Image credit: Steve Brodner

The bulk of Adelson’s arguments essentially strengthen the case for regulation and as regards the loss of jobs and alleged adverse effect on land-based casinos, this concern has long been refuted by the regulated European markets. And even if nobody seriously believes that online gambling is actually at stake, Adelson’s campaign may indeed cause a setback in the process of state-by-state regulation of online poker in the US and should not be taken lightly.

In any case, the stakes are high and the players are all eminent high rollers, so grab your popcorn and enjoy the show!