Opinion: Head in the Sands

Sheldon Adelson recently launched a vicious attack on online gaming in Forbes in a piece called “Online Gambling is fool’s gold”. Mr Adelson has achieved great success and a legendary turnaround in his company’s fortunes in land-based gaming and entertainment through his strategic vision. What a pity this vision deserts him when it comes to online gaming and naked self-interest.

When I first read Sheldon Adelson’s article in Forbes criticising the digital gaming industry it was hard to believe that I hadn’t been transported back 10 or more years. The same old arguments, which have largely been put to bed, were trotted out once again. There is no denying that Mr Adelson has been hugely successful since founding the Sands Corporation, taking it public and expanding internationally. However the notion that a digital environment, with its perfect closed loop of data, cannot be effectively regulated whereas physical casinos, which accept cash from anonymous patrons, can, is fanciful in the extreme. Mr Adelson’s arguments simply do not bear close scrutiny.

First, Mr Adelson claims that voluntarily excluding the Sands Corporation from online gambling is a moral stance on his part. Is this the same Sands Corporation that obtained an Alderney license and set up Venetian Interactive in 2003 only for it to disappear without trace? Or signing a deal with Cantor in 2006 for the supply of online gaming? Hardly the actions of a principled person opposed to online gambling. Mr Adelson claims that his Venetian brand would be an effective online competitor but is being disingenuous in seeking to airbrush his ill-fated online venture from history. Of course the Venetian could compete online. However shareholders of the parent company might decide it needs a complete cultural change with regard to digital gambling, to have a sporting chance of getting it right. Starting at the top.

“Click your mouse and lose your house” is the emotive old line favoured by Senator Kyl. But even he has moved on to support online poker in principle. It’s a great sound-bite, but an insult to adults who, Mr Adelson is indirectly saying, are not to be trusted to act responsibly or spend their money as they see fit in a safe and regulated environment. Presumably plying adults with hard liquor to encourage them to gamble more in a physical casino is setting a higher moral standard.

Mr Adelson also states that he wants greater enforcement against offshore operators who engage in transactions with US citizens. Clearly Mr Adelson is toeing the DoJ line here and is ignoring the fact that the US lost its WTO dispute as a result of GATT commitments it gave in respect to gambling. Not to mention allowing his fellow citizens freedom of choice.

Mr Adelson correctly states that his company makes most of its casino profits in Asia but then then falls flat on his face with the statement “where online gambling doesn’t exist and won’t be legalised soon, if ever”. The kindest thing to say is this displays staggering ignorance on his part. I know I don’t need to tell eGR readers of the size of the Asian online sports, casino and skill games markets, while poker and lottery are showing some growth there as well. Regulated online licenses exist in 10 Asian jurisdictions according to onlinelicenses.com.

By putting his head in the sand and pretending that digital and online technology can be held back, that Asian online gambling doesn’t exist and ignoring his company’s own foray into online gaming, Mr Adelson has embarrassed himself and his company. Corporate history is littered with examples of companies that haven’t adapted and, like dinosaurs, have become extinct.

Does the same fate await an otherwise visionary CEO who cannot see what regulators around the world – including his own country ““ can? That is to say that by regulating online gaming we can build the best safety nets for the vulnerable, generate audit trails that support sports betting integrity, and create the most rigorous systems available in the world to detect money laundering.

So, as for Mr Adleson’s “fools gold”? I’d suggest another adage: there’s no fool like an old fool.