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FORBES TAKES AN INTERESTING LOOK AT THE A.G.A. AND ONLINE POKER
Tuesday October 4, 2011 : FORBES TAKES AN INTERESTING LOOK AT THE A.G.A. AND ONLINE POKER
Top business magazine gives some interesting insights into the Association's change of heart
Providing interesting reading this weekend is an article in the respected business publication Forbes, which examined the growing momentum for legalised online poker in the United States and the attitude of the American Gaming Association...and how it changed.
Titled "How The Las Vegas Casino Companies Became The Champions Of Online Poker In America", the article features interesting insights from the trade body's president and chief executive Frank Fahrenkopf Jnr, who was present at key meetings in which the future stance of the biggest land gambling companies in America was decided.
Fahrenkopf relates how in December 2008 the top executives of major land gambling groups comprising the AGA's membership met in the Las Vegas offices of IGT to discuss and possibly change their antipathy towards online gambling. At the time the business environment was bad and the companies were under financial and business pressure, perhaps a motivation for a sea change in approach.
It did not materialise; although some members like Gary Loveman of Harrahs liked the idea of supporting legalisation, Steve Wynn of Wynn Resports was dead set against it, and in the absence of unanimity the "neutral" stance of the AGA was maintained.
However, the rest of the world was not waiting for the casinos or Congress, and for another year the Las Vegas casino industry "sat on the sidelines while offshore companies like PokerStars and Full Tilt Poker made fortunes from the massive U.S. online poker market."
The article studies the phenomenal success of the offshore internet companies in exploiting the vacuum left by the American corporates and politicians, and notes that by March 2010 Wynn was no longer a member of the AGA and the way was clear for a more supportive policy.
"The AGA’s decision fueled a serious effort in the fall of 2010 to pass federal legislation that would have officially legalized and regulated online poker. Senate Majority Leader Harry Reid of Nevada quickly flip-flopped on his long-standing opposition to all forms of Internet gambling and led the charge during last year’s lame duck Congress," the piece recalls, noting that the AGA's policy change had a major impact on the strategies of the offshore companies.
It explains how they responded to the changing situation, providing lobbyists and corporates with new opportunities.
Then the events of Black Friday unfolded in April 2011, derailing much of the progress that was being made and throwing the industry and related initiatives into reverse. The Forbes article examines the developments in an even-handed assessment, concluding that the AGA is seizing the initiative and using the environment that has been created to further the cause of strictly regulated online poker, operated by American companies.
“There is a whole different attitude on the Hill and in the country and in a funny way the PokerStars and Full Tilt events, both on April 15th and last week, show the need for legalization and regulation of online poker,” Fahrenkopf told the Forbes writer.
“What we want is a clear definition of what is legal and illegal and to develop some tax revenue and jobs.”
Fahrenkopf emphasised that the AGA favours a federal approach to legalisation, but accepts that "it’s going to be tough sledding in a divided Congress" to get legalisation through.
The veteran executive thinks he can do business with the new Tea Party members of Congress, but he also has to deal with the usual array of interests ranging from the tribes to the state lotteries that have traditionally proved tough for proponents of online poker, not to mention Jon Kyl, a Republican who has been blocking such efforts for years.
If Fahrenkopf fails, it’s hard to see federal lawmakers sanctioning online poker until 2013 at the earliest, Forbes concludes. State lawmakers seem ready to pounce and do something on the state level in January, but it’s still not clear how those efforts would work.
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