The Fight: How the AGA Let Down the Online Gaming Industry

Lance Bradley

‘No position’ is a bad position

The American Gaming Association is the voice of the casino and gaming industry. They rely on the AGA to present legislators and the general public with a unified message detailing the benefits of the gaming industry.

As its mission statement reads, the AGA has the “fundamental goal of creating a better understanding of the gaming entertainment industry by bringing facts about the industry to the general public, elected officials, other decision makers and the media through education and advocacy.”

But when it comes to one particular issue the AGA is not living up to its promise: Online gambling.

Even though the group’s “About Us” page contains the following passage, “The AGA represents the commercial casino entertainment industry by addressing federal legislative and regulatory issues affecting its members and their employees and customers, such … Internet gambling …” the group has turned its back when it comes to online gambling advocacy.

In March of 2014, the AGA decided to pass on the issue of online gambling, taking the position of “no position,” and leaving the iGaming industry to fend for itself in what is becoming an increasingly hostile and well-funded fight.

The AGA’s abandonment of the iGaming industry, including many of its own members who are pushing for iGaming expansion is nothing less than a betrayal. It’s a betrayal of the group’s members and of its outlined mission statement.

A subtle but notable absence at G2E

During the 2014 Global Gaming Expo (G2E), the AGA had a strong presence. As the conference’s main sponsor it had a very visible presence, both on and around the showroom floor, and during the seminars that were held.

Despite repeatedly talking about the importance of messaging, and need to fight half-cocked accusations leveled against gaming with facts, the AGA has hypocritically turned a blind eye to the machinations of Sheldon Adelson (a key member of the AGA) and some of his allies.

Adelson’s assault on online gambling directly affects many of the AGA’s other members, including the gaming juggernaut that is Caesars Entertainment, yet the AGA is willing to let these unfounded and in many cases ludicrous attacks slide — despite its mission statement that states, “bringing facts about the industry to the general public, elected officials, other decision makers and the media through education and advocacy.”

As Jeffrey Haas, the group director of bwin.party told Bluff in an interview on the final day of G2E, “We’ve been betrayed by the AGA … taking no position is the cheap and easy way out.”

How the AGA settled on “no position”

Perhaps the most disappointing part of the AGA’s current stance is how it arrived at it.

Under former President and CEO Frank Fahrenkopf the AGA was for a long time hesitant to throw its support behind online gambling, but the group started to come around in recent years[i], going so far as to support federal efforts to legalize online poker[ii], and to actively advocate for legislation[iii] under Fahrenkopf.

When Geoff Freeman took over for Fahrenkopf as the AGA’s president and CEO in June of 2013, the group’s support for online gambling took another step forward when Freeman testified before Congress in December of 2013[iv]. During his testimony Freeman’s and the AGA’s support of iGaming legislation was made very clear as he stated, “Prohibition simply does not work … the American Gaming Association supports strong regulation and oversight of online gaming that respects states’ rights to pursue what is in the best interest of their residents.”

Then in March the AGA undid what was nearly a half-decade of progress on online gambling in a single stroke by caving in and adopting its current “no position” position on online gambling; retracting its position not based on new evidence or what is best for its members, but based on expediency.

There is little to no truth to the claims that are being lobbed against regulated and licensed online gaming sites, yet the AGA is applying a false equivalency to them, and giving the naysayers equal consideration.

Would the AGA take such a stance if one of its powerful members adopted the position that Atlantic City casinos should be razed to the ground? This is essentially what the demagogues are calling for in the iGaming sphere, and the AGA is effectively allowing them to disparage what is a respectable part of the gaming industry.

Again, I have to repeat Jeffrey Haas’s comment, “taking no position is the cheap and easy way out.”

Without the AGA the iGaming industry has no voice

Why is the AGA’s support so important?

Without the AGA’s support the online gambling industry is left somewhat fractured, and in the world of lobbying and messaging, the sum is almost always greater than its individual parts.

The small but vocal opposition to online gambling has managed to create a united front thanks to Sheldon Adelson’s deep pockets, while the proponents of iGaming regulation are speaking with several different voices, and in some cases attacking and contradicting one another for self-serving reasons.

Instead of a consensus opinion on issues such as PokerStars and “Bad Actor” clauses, we have a variety of different opinions and infighting, as there is no single group working toward creating the unified message.

Think of how easy it is for Sheldon Adelson to demonize PokerStars (and by extension online poker sites) when you have groups fighting for online poker expansion doing the same thing?

On one hand, you have California tribes and card rooms who are lobbying legislators to include a Bad Actor clause. On the other, you have PokerStars competitors saying Bad Actor clauses are unnecessary but they should spend some amount of time in the penalty box. And then there is PokerStars and its allies saying leave it up to the regulators.

These disagreements, these self-serving actions are somewhat suicidal in nature, considering Adelson and his allies are allowed to drive home their narrative at will. The companies engaging in these in-house fights may think they are progressing their own interests (limiting competition), but they are failing to realize that without an industry their singular agendas simply don’t matter.

What good does it do to keep PokerStars out of the California market if the fight to prohibit PokerStars leads to the opponents of online gambling triumphing?

Things need to change, or the change we will get is one we don’t want: stalled legislative efforts, small fractured markets, and even a possible online gaming ban.

The AGA needs to rethink its current position on online gambling and get dealt back into this game.



[i] http://www.americangaming.org/newsroom/press-releases/american-gaming-association-launches-effort-to-advance-federal-online-poker

[ii] http://www.reviewjournal.com/business/casinos-gaming/agas-ceo-frank-fahrenkopf-expects-federal-poker-bill-be-revived

[iii] http://www.americangaming.org/newsroom/op-eds/federal-online-gambling-legislation-needed-now-more-than-ever

[iv] http://democrats.energycommerce.house.gov/sites/default/files/documents/Testimony-Freeman-CMT-Online-Gambling-2013-12-10.pdf

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November 2014