Last week Caesars Palace hosted the 5th annual C5 US Online Gaming Forum and one of the most important moments occurred just after lunch on day one of the conference in a debate over whether online gambling should be regulated or prohibited at the federal level.
The debate was titled, Two Sides of the Coin: Federal Regulation or Prohibition?, and was moderated by Roger Gros of Global Gaming Business. The participants were Fabian Nunez of Mercury Public Affairs, who is also a lobbyist for Sheldon Adelson, and Jan Jones Blackhurst, the Executive VP of Communications & Government Relations, Caesars Entertainment (similar to Andy Abboud’s job title at Las Vegas Sands).
The unexplainable state’s rights argument
Nunez proved himself to be one of the better Adelson surrogates, and did much better than his performance at the California Conference on Online Gambling back in May. But like all the other Adelson proxies before him (Andy Abboud, Willie Brown, Lindsey Graham, Jason Chaffetz, Rick Perry, Bobby Jindal and a solid supporting cast as well) he was still unable to explain how a federal ban was somehow protecting each state from an overreaching government action.
On the other side, Jones Blackhurst argued that a federal ban was inappropriate and she believes the matter should be left up to the states, which is the actual state’s rights argument; not the bastardized version the Adelson side is pushing.
Nunez opined that “obviously the states have a right to intervene as they see fit” on iGaming, making the same illogical fallacy that so many of his predecessors have stumbled into, as they are unable/unwilling to properly explain how a federal ban allows states to make their own decisions, particularly for the three states that have already passed online gaming laws, Nevada, Delaware, and New Jersey, as well as the three states with online lottery sales, Minnesota, Illinois and Georgia.
Where is their right to intervene if you snatch online gambling/poker/lottery away from them?
Is federal iGaming legislation coming?
Another interesting rumor that sprouted wings at USOG was the potential for a federal ban that included an online poker carveout.
No less than four USOG panelists mentioned this rumor, with varying levels of belief:
Bally Tech’s John Connelly started the ball rolling when he stated that he expects a federal push to make “everything other than poker illegal” to occur this November during the “Lame Duck” session of Congress.
Roger Gros then asked both Jones Blackhurst and Nunez for their thoughts.
Jones Blackhurst was bearish on the chances that a federal bill would be able to pass, but didn’t outright dismiss the possibility of a “Lame Duck” compromise on online gambling legislation. Nunez was a bit more skeptical, but considering he is representing the man aiming for the ban to go through, his comment of “It’s difficult to get anything done in Washington,” could be seen as a clever way to deflect the question.
Later in the conference, New Jersey attorney Bill Pascrell III said anyone who thinks Congress will pass an online gambling bill is “smoking funny cigarettes.”
Whatever the case may be, this is certainly something to keep an eye on when Congress comes back to Washington DC following the mid-term elections.
Nunez points out mistakes
At the tail end of the debate, Fabian Nunez was apparently speaking off-the-cuff, and in an extremely candid manner when he essentially “opened up the CSIG (Coalition to Stop Internet Gambling) playbook,” as Chris Grove put it.
Nunez detailed several areas where Adelson’s coalition has been able to attack online gaming advocates, and make inroads with legislators in California –Nunez credited Adelson and his team for stopping online poker in California in 2014, but this seems a bit of an overstatement.
The first area they attacked was the gap between the initial (grossly overstated) projections by Governor Chris Christie in New Jersey and the actual revenue generated. Nunez called this “one of his most effective arguments with California legislators.”
Nunez also indicated that poker supporters’ inability to coalesce around a single approach was damaging to their efforts.
As the debate was wrapping up, Nunez offered one final bit of advice to his opponents, and that was to raise consumer awareness in regards to the safeguards and safety measures that are in place, particularly when it comes to real time identity verification.
This is certainly one of the most difficult tasks logistically, but it should be noted that the operators need to do a better job in this area as the legal online poker sites in New Jersey are very difficult to differentiate from the previous (and current) illegal online poker rooms.
The marketing is the same; the websites look similar; and nobody in the space is focusing on the key difference and highlighting the fact they are licensed by the New Jersey Division of Gaming Enforcement and the state of New Jersey.
This should be front and center on their homepage in my opinion, as it’s more important than any tournament guarantee or deposit bonus.
Nunez didn’t detail anything industry followers and analysts don’t already know (myself and others have been harping on things like consumer awareness and foolish revenue projections for quite some time), but what he did let slip during the discussion was what Adelson and CSIG have found to work, and where the focus of online gaming advocates should be placed going forward.
As a final note, we no longer have to rehearse for when an Adelson surrogate whips out their cell phone and waves it around screaming about mobile casinos. Nunez introduced CSIG’s new conference prop, a copy of Newsweek!
CSIG, the Carrot Top of online gaming conferences.
Author’s note: I relied heavily on Chris Grove’s live tweeting of the conference for this article. You can follow Chris on Twitter here.