From the Rumor Mill: Sands is Opposing Barton Bill for fear of Caesar’s Head Start

Sands CEO Sheldon Adelson announced recently that he is opposed to current bills aimed at legalizing online poker. Caesars now finds itself in the driver’s seat while Adelson’s Sands is not prepared for the eventual legalization of online poker.

Sands CEO Sheldon Adelson announced recently that he is opposed to current bills aimed at legalizing online poker. In particular, Adelson is challenging Joe Barton’s bill which would legalize poker immediately. Adelson may seem like an insignificant player in the equation, but he is the 8th wealthiest man in America with a net worth of $21.5 billion and is a major donor to the Republican Party. It should be noted that the Sands has indicated it is neutral as an organization towards the bill, but in reality they march to their owner’s demands.

Adelson’s stated reasoning according to the Las Vegas Sun is that “he is morally opposed to web gaming, that technology to bar minors is untested and that he believes it will be an unnecessary distraction in 2012.” However, sources I have spoken to who are well in tune with all the developments indicated the real reason Adelson is opposed to legalized online poker is fear of the competition. The American Gaming Association (AGA), which represents numerous casinos such as Caesars and the MGM, has indicated that they now support online legislation provided it only deals with poker and not other casino games. Caesars was hesitant to support online poker when it partnered with 888 Holdings after Wynn and Station Casinos partnered with Full Tilt and PokerStars respectively, but, after Black Friday, Caesars now finds itself in the driver’s seat. 888 Gaming is in the country’s good book since it pulled out of the U.S. market after the passing of the UIGEA and paid off the government’s “penalty” for the time it did allow American accounts, while Full Tilt and PokerStars are cut off to the American market forever. Thus, Caesars is ready to go with its poker product in partnership with 888 Holdings while the other casinos have to find new dancing partners. And the Sands never prepared for online poker whatsoever. No doubt Adelson realizes that if the law is passed Caesars will have a huge head start on the Sands and it is unlikely the Sands would make much headway even after it finds a company to partner with. Not surprising, therefore, Caesars and the AGA are anxious for the bill to pass sooner rather than later. But Caesars is also adamant that any new law only deal with poker since they want a federal law for other forms of gambling that Caesars undoubtedly will want to run that on their own.

Barton is very eager for the bill to be passed before the next election and has even indicated he may consider attaching it to other legislation before the year is out, similar to the way Bill Frist and the Republicans were able to shove through the UIGEA as an attachment to the Safe Port Bill in 2006. Similarly, Harry Reid is getting anxious to see online poker legalized in Nevada and John Campbell is now ready to get the ball rolling with online poker in California, since they reached an agreement with the Indian tribes.

The question, though, is who has more influence? Caesars and MGM are clearly much larger than the Sands and operate casinos throughout the United States but Adelson as mentioned is a major donor to the Republican Party. According to reports Adelson made millions in donations to the Republicans over the years including $800,000 to key political candidates like Geroge W. Busch, Tom Delay and Rick Santorum. Plus, last year he made a $1 million donation to the current Republican front runner Newt Gingrich’s organization, American Solutions for Winning the Future. So no doubt supporters of Gingrich in Congress may have a bug put in their ear by the frontrunner. Plus, Adelson recently approached John Kyl to express his concern and asked for his support to block the legislation. Kyl never made a commitment either way but said that he always listens to Adelson when he talks. Kyl, as many will recall stated that he was changing his views on online poker legalization but it’s unlikely that he honestly believes that personally since he stated numerous times that “he hates gambling.” Unfortunately for both Adelson and Kyl the Democrats still have the majority in the Senate so Kyl’s influence as a whip may be irrelevant.

On the other side of the coin Caesars is an important employer in the country and revenue generator, plus they have some key Republicans in their court, including former head of Homeland Security, Tom Ridge and former FBI agent Louis Freeh who are advisors for their organization, FairPlay USA.

It will certainly be an interesting battle but Adelson could have avoided it if he just was better prepared for the introduction of legalized online poker.


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