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Sports Betting Hearing To Feature Sheldon Adelson's Anti-Online Poker Group

Coalition To Stop Online Gambling Given Seat At Table


Online gaming opponents appear to be lining up for one last Hail Mary.

On Thursday, a congressional subcommittee will hold a hearing on sports betting in the wake of the Supreme Court lifting the 1992 ban in mid-May. Despite the progress on bringing sports betting out of the black market, the hearing will feature testimony from a group whose sole aim is keep online casino gambling illegal. It’s hard to imagine the group would have a seat at the table were it not for its powerful backer, who is the 21st richest person on the planet.

The House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations will meet at 10 a.m. Thursday on Capitol Hill. The hearing will be live streamed here.

According to the House Judiciary Committee’s website, among those set to testify in front of federal lawmakers is the controversial Coalition to Stop Online Gambling, the Sheldon Adelson-backed lobbying group that is seeking to prevent the regulation of a slew of online casino games, including traditional poker. Former Nebraska Attorney General Jon Bruning, a Republican, will represent the group at the hearing.

Banning (or at least slowing the spread of) online casino regulation has been one of Adelson’s top political priorities over the past six years or so. Adelson, founder of Las Vegas Sands Corp., once famously wrote that he would “spend whatever it takes” to stop casino games from going online. Adelson, owner of the world’s largest casino developer, claims online gaming would hurt society, while his critics point out that the activity is already available via offshore betting sites. They also charge that Adelson is motivated by protecting his casino empire from rivals who have moved online, such as MGM Resorts International and Caesars Entertainment Corp.

“Three states have already legalized internet gambling and many more are actively considering following suit,” says the Coalition’s website. “Given the potential for money laundering, terrorism financing, fraud and other criminal activity, participation by minors, exploitation of individuals with a gaming addiction, and the impact on jobs and economic activity, Congress must act now to protect American families from predatory internet gambling.”

The Coalition’s website is actually out-dated. There have been four states with legalized online gambling for nearly a year now. Pennsylvania joined Nevada, New Jersey and Delaware last fall.

The emerging U.S. sports betting market, which is currently limited to just a handful of states, could grow to more than $15 billion annually in terms of revenue if all states have the activity, according to an analysis earlier this year from research group Eilers & Krejcik Gaming. Americans are said to bet about $150 billion per year on sports, according to research from the American Gaming Association. Historically, about 97 percent of that handle has been wagered through illicit channels, according to the casino industry.

The regulated sports betting industry will not reach those heights without bets being taken over the internet, especially over mobile devices. That’s already happening in Nevada, where Adelson has casinos, as well as in New Jersey. It’s unclear where Adelson’s Coalition stands on widespread internet sports betting, but that will likely come out during Thursday’s hearing.

The Coalition has spearheaded efforts in previous years to “restore” the 1961 Wire Act in order to try and prevent states from legalizing online casino gambling. Discussions on legislation to do just that included a potential carve-out for state lotteries that offer gambling over the web. Those talks greatly weakened Adelson’s attempt at establishing a moral high ground when it comes to internet betting. The Coalition could call for a similar exemption for sports betting. The casino industry has gone all-in on sports wagering, so it’s implausible that online sports betting would be prohibited. The professional sports leagues, long resistant to sports betting, are now on-board with the activity, as long as there is federal oversight. That’s the purpose of Thursday’s hearing.

It’s a heavyweight super-fight between the casino industry and the leagues over regulated sports betting. Thursday’s hearing could be the first of many in the coming months.

In addition to Adelson’s Coalition, the NFL, the AGA and the Nevada Gaming Control Board have signed on to testify. The NFL has historically been hostile to gambling, but now that the floodgates are open and the Raiders are moving to Sin City, the league has done a 180. The NFL wants greater power over the sports betting industry, however, which is a spot of contention among the stakeholders. The casino industry actually commissioned research to show the NFL that it will benefit to the tune of $2.3 billion from sports betting even without new federal mandates. The NFL, which had an estimated $14 billion in revenue last year, wants more under Roger Goodell’s quest to get the league to $25 billion in revenue annually by 2027.