Friday March 21,2014 : ABBOUD PRESENTS THE ADELSON VIEW ON INTERNET GAMBLING
Cliff notes on an interesting exchange of views at iGaming North America.
The prospect of a debate by senior executives on both sides of the US online gambling issue packed out the large conference room at the Planet Hollywood Resort this week, with over 500 industry people in the audience as the iGaming North America conference kicked off.
Given the pro-online gambling nature of the crowd, Adelson henchman and senior executive at his Las Vegas Sands brick and mortar gambling company, Andy Abboud, was not lacking in courage or confidence, and in addition he faced a tough debating opponent in Mitch Garber, chief exec of Caesars Interactive Entertainment and a 21-year veteran of the online gambling industry.
Here are some cliff notes from the 45-minute exchange:
* Abboud was upfront on his company's reasons for vehemently opposing the continued legalization of online gambling in the United States, quoting Adelson's moral objections, fears that the technology was not sufficient to protect against underage or problem gambling and that it would "crush" many in the bricks and mortar gambling industry.
* The Las Vegas Sands executive confirmed that he wanted to see the federal reimposition of a tougher Wire Act that banned all but internet wagering on horse-racing. However, later in the debate he said that if an exemption for online poker was inevitable, he would prefer the Joe Barton bill currently in Congress. That differed from the view of Adelson himself, who did not want legalised online poker, Garber pointed out.
* Abboud's claim that Adelson and Las Vegas Sands had been consistent in their opposition to online gambling was subsequently rebutted in a Nolan Dalla.com blog which pointed out that a Pokerstars live tournament had been held at a Las Vegas Sands venue, and that the company had previously flirted with online gambling.
* The Las Vegas Sands executive said that repeated polls bought by his company showed that the average American did not want legalised online gambling, a claim which Garber contested, saying that the polls were both bought and inaccurate, and that in his opinion what Americans wanted was the freedom of choice.
* Garber accused Las Vegas Sands of being "closed-minded" on the issue of online gambling, observing that there had been insufficient effort to understand the industry or the technology, and that many reputable companies in the online side of the industry had been willing and able to pass the same rigorous testing and probity requirements as major land operators seeking licensing from US regulatory bodies.
* Abboud made the stunning admission that despite being given the advantage of a briefing by online gambling experts, he had been unable to follow the technical and business information presented to him. Answering criticism from Garber that he had not bothered to contact CIE for a briefing, Abboud said:
“I have sat down with your company and was debriefed, and the technological presentations that your company made – they lost me. An entire room of people walked me through the technology in D.C. and I said, one, I don't believe it, and two, I think it's a barrier to the market, until you shut down the illegal operators.”
* Abboud said that his company does not worry about reputable companies like Caesars; offshore operators with lesser regulatory credentials were the main concern and it was important that they be excluded from the market, if necessary by enforcement actions – a sentiment with which Garber seemed to be in agreement, reinforcing the need for US regulation.
* Abboud suggested to Garber that if the online gambling drive went ‘wrong' CIE's brick and mortar business could be at risk.
* The Las Vegas Sands executive does not appear to have a high opinion of the PPA or its Twitter followers, describing them as "creepy."
* Garber opined that the advanced technologies used by online gambling companies were superior to the human interfacing and technology used in large part by land casinos in excluding underage or problem gamblers and reducing the risk of criminal involvement.
Caesars, he said, can identify every person who logs onto the sites, track every dollar wagered and track play history. “You have no idea where the money is coming from in your Macau casinos,” Garber claimed.
* Garber said the online gambling industry is realistic, catering to a new generation of casino users comfortable with modern technology and the internet, and this offered great opportunities for the industry and an obligation to ensure that players received fair and safe services.
* Abboud warned that if it was legalised the US online gambling market was limited in size and scope, and that there would be casualties among those companies supporting the competitive new business.
* Abboud appeared particularly concerned about the prospect of "bad actors" entering the market, saying: “When you read an article that PokerStars wants to make sure the bad actors can be in the business, then that's bad news for the industry.”
* Attacking what he described as unfounded and overblown fears about online gambling, Garber pointed out that in 21 years in the business he had seen billions of dollars in online gambling transactions pass safely through online gambling company systems with few incidents warranting the negative claims that have been made about the genre.
“The fact of the matter is, in all my years, through all the billions of dollars of transactions and revenue that I've seen, the issues of problem or minors gambling have not come to pass, any more than they come to pass in land-based gaming," he observed.
"The incidences of money-laundering and terrorism have not come to pass. What has come to pass is that there are many rogue operators today facing the US, generating billions of dollars of non-taxed, non-regulated revenue.”
* Abboud referred to the recent hacking at his company, using it to illustrate the insecurity of the internet. He also referred to lawsuits against Apple, suggesting that adopting online gambling could expose the gambling industry to class action lawsuits.
“We are going to be a lawyer's dream in class-actions lawsuits, a dream for litigators,” he suggested.
* Abboud said there did not appear to be any room for compromise in his company's opposition to online gambling, and in his closing remarks he appeared to revert to scare tactics, telling the audience:
"The unluckiest people in this crowd are the Indian tribes and the smaller gaming operators – there is never going to be a market for you. Ever. Either it's going to crush your brick-and-mortar or you just won't be a part of it.
“The really smart operators are going to partner with the gentlemen from Facebook or Google or any of those companies, because they know it better than any of us. The rest of you probably don't have much of a shot, and you should know that up front.”
The admittedly unsympathetic consensus of those commenting on the debate appears to be that Garber presented a far more rational and factual argument.
The respected Nolan Dalla blog went so far as to comment:
"If I was in Sheldon Adleson’s camp, I’d start looking for a different messenger. Maybe someone who doesn’t get “lost” on matters of high-tech. Someone who knows The Venetian’s incestuous past with an online site. Someone who doesn’t describe the opposition as “creepy.”
Another good read is here: