If states want online gambling, let them roll the dice.
With a $2 billion shortfall in the Pennsylvania state budget and a recent credit downgrade putting the state in the nation’s bottom five, officials put all cards on the table — including Internet gambling. Last week, due to estimates showing that legalization could raise $200 million and avoid tax increases, Harrisburg decided to give it a whirl.
So far, it appears Pennsylvanians have a winning board. After just two days, the state has already collected $1 million in revenue.
Internet gambling regulations are one of the many issue areas that fall under the states’ rights category, and a growing number of people are finding legalization to be a successful revenue raiser. Unfortunately, not everyone agrees, including casino owner and billionaire Sheldon Adelson, who is behind federal and state lobbying campaigns to prohibit it.
Behind the scenes, Adelson’s Coalition to Stop Internet Gambling, or CSIG, made the Pennsylvania state budget a battleground for his legislative card-counting. Instead of allowing Pennsylvanians to decide which policies are best for themselves, Adelson, who owns the state’s Sands Bethlehem Casino, tried to divide Republicans and Democrats, enabling a budgetary shortfall by pushing for a crony prohibition on Internet gambling.
While Pennsylvania overcame Adelson’s astroturf lobbying push, his coalition is still working in several other states to advance casino owners’ interests. For example, in Michigan, CSIG recently testified at a House hearing, alleging that online gambling feeds addictive behavior and can potentially harm children. Political budgetary battles are not a new game, but seldom do out-of-state forces receive such a loud microphone.
Adelson’s time is not just invested in these localized campaigns. To make matters easier, he is also pushing a federal bill that would override these state laws in one fell swoop.
Adelson has been pushing the Restoration of America’s Wire Act, or RAWA, for several years. It is rooted in crony dealmaking and would have a disastrous impact on the Pennsylvania state budget, among others. This summer, Adelson hired a longtime friend of Attorney General Jeff Sessions to lobby the Justice Department on this issue.
So why does the big-time conservative donor want Congress to go all in on a bad hand?
It’s merely crony capitalism. In accepting market innovation and digitization, many other casino CEOs have folded their hand in the fight against online gambling. Adelson, however, has raised his. By lobbying Congress to enact RAWA, Adelson can isolate his casino empire from the realities of Internet gambling.
RAWA’s purpose is to update the Federal Wire Act of 1961 — legislation written to ban illegal mafia sports betting over the phone — to now include a prohibition on most online forms of gambling. Interestingly enough, the legislation exempts fantasy sports, either because it doesn’t interfere with Adelson’s casino empire or because that’s a losing bet. As is the nature of any casino business, management must manipulate the odds to stay profitable. Similarly, Adelson wants to make sure there’s no potential for Internet gambling to change the landscape of his industry.
But Adelson isn’t stomping out Internet gambling rivals through free-market competition.
Indeed, he wants to make crony deals with Washington and undermine our states’ rights outlined in the Tenth Amendment to the Constitution. If enacted, RAWA would overturn laws that legalized online gambling in New Jersey, Delaware, and Nevada. RAWA would also undermine online lottery purchases in Michigan, Illinois, and Georgia. In Adelson’s world, you can choose to gamble, so long as it’s on his terms.
Although you won’t hear Adelson support states’ rights, you will hear him guise his crony lobbying efforts as a moral issue. He masks his own self-interest by claiming online gambling would worsen gambling addictions and make gambling more accessible to children. If such a moral crusade were truly Adelson’s top issue, RAWA’s prohibition wouldn’t exempt some forms of Internet gambling such as fantasy sports. Let us also be reminded that Adelson is the CEO of Las Vegas Sands Corp., which helped to grow his $35.7 billion net worth. His very own career relies on people coming back to gamble more.
But as a longtime entrepreneur and hospitality CEO, one would think that Adelson is more in tune with market demands.
The reality is that the economy looks a lot different in 2017. The Internet has birthed the sharing economy and transformed most industries. Just as the rest of the world can’t ignore the digital age in which consumers get access to what they want on demand from a smartphone in their pocket, the gambling industry shouldn’t confine itself to physical casinos. There’s profit to be made in Internet gambling and states are catching on.
Legalizing online gambling would be a beneficial play for many states and Adelson is standing in the way. Legislators should stand up to these crony interests and support the choices of consumers — whether they’re a gambler or not.
Matthew Boyer is a media relations associate with Students For Liberty and a Policy Analyst for the Consumer Choice Center.
If you would like to write an op-ed for the Washington Examiner, please read our guidelines on submissions here.