BILLIONAIRE PHILANTHROPIST OPENS FIRE ON US ONLINE GAMBLING

Published on January 7, 2015 in Industry News

US Online GamblingFrom its modest beginnings in 1994 with the launch of the first online casino, the online gambling industry sky rocketed into a multi-million dollar industry. Whenever there is money to be made, or lost in the form of taxable revenue, the US government is quick to intervene. 

US residents were warned to avoid online gambling as it contravenes the Wire Act of 1965. The online gambling industry responded by proving that the Act had no bearing on gambling at US online casinos. It focused on placing bets on sporting events over a phone line. Placing a bet on a horse race over the phone with a bookie was illegal, not playing online slots. 

In 2002 the US Court of Appeal upheld an earlier ruling which clarified that the Wire Act “in plain language' does not prohibit Internet gambling on a game of chance.” The Department of Justice (DoJ) continued to use the Wire Act as the impetus behind its attempts to close down online casino play in the United States.

September 2006 saw the online gambling sector turned upside down. A pre-existing Act known as the Safe Port Act which is aims to “improve maritime and cargo security through enhanced layered defenses, and for other purposes.” had sub-item added titled ‘Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006’.

The UIGEA aimed to make it illegal for online businesses to process gambling transactions in the USA. However the UIGEA only prohibits “accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.” To date there is no Federal law which defines an unlawful bet or wager as it relates to online casino, certain States have made their own attempts at such a descriptor. 

Subsequent adjustments to the Safe Port Act have allowed for Delaware, New Jersey and Nevada to allow online casino gambling at a state level.

Encouraged by the prospect of a legal USA gambling industry many were shocked when 2014 saw Sheldon Adelson, American businessman and philanthropist, come out strongly in opposition to the legalisation of online gambling. The billionaire launched the ‘Coalition to Stop Internet Gambling’ (CSIG), with one aim in mind, convincing Congress to ban online casino gambling.

As a philanthropist his interest challenging online gambling may seem noble, however this illusion fades in light of the fact that he is both CEO and Chairman of the Las Vegas Sands Corporation which showed a gambling generated profit of over $1.6 billion dollars in a September 2014 review. 

His opposition to becoming a leader in online gambling seems at odds with his entrepreneurial bent. However Adelson has a long history of being the financial power behind those looking to claim political power in the US. 

With a number of politicians stepping up to support CSIG it supports the assertion that this is nothing more Adelson creating a political platform for the 2016 elections.  Ron Paul, a Texas Republican, openly stated that “It is an open secret, at least inside the Beltway, that this legislation is being considered as a favor to billionaire casino owner Sheldon Adelson”. 

Not everyone who operates a brick-and-mortar casino sees eye-to-eye with Adelson. The MGM Grand and Caesars Palace have joined forces to form their own coalition, the ‘Coalition for Consumer and Online Protection’ (CCOP). They promote educating users about online gambling, creating clear guidelines and processes for the industry and most importantly they stand for the right of US citizens to determine how to manage their money and how to utilise the internet. Their goal is to eliminate the black market gambling sector (which prohibition only serves to strengthen) and improve overall revenue generation through these activities.

Chuck Canterbury, National President of the Fraternal Order of Police (FOP), an organisation who fully supports CCOP’s ideologies, wrote one of the clearest and most logical statements of intent to Congress on this issue:

“The FOP wants to protect our citizens and the best way to do this is to drive black market online gaming into the light and scrutiny of a regulated system that is safe, fun and fair.”