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May 3, 2014
Dan Morain: Sheldon Adelson campaigns against Internet gambling

internet_poker.JPG(May 3 - By Dan Morain, Editorial Page Editor)

Well-tanned and wearing a finely tailored suit, Andy Abboud looked every bit the sharp operative he is, representing the nation's richest gambling corporation, one that is controlled by one of the world's wealthiest billionaires, Sheldon Adelson.

Abboud arrived in Sacramento early to testify about an issue dear to his boss, the legalization of online poker. In time, Internet wagering could become the biggest gambling expansion since California voters approved Vegas-style casinos on Indian reservations in 2000.

Five hours after the Assembly hearing began, at an hour when many lawmakers were at Capitol-area watering holes raising money, Abboud sat sandwiched between the woman who oversees California's underfunded program to control gambling addiction and the Rev. James Butler, who runs the California Coalition Against Gambling Expansion.

"I really did not know who he was until he spoke," Butler said.

Butler, one of the lonelier voices in the Capitol, has been fighting losing battles for the better part of a decade in Sacramento.

Adelson's Las Vegas Sands Corp. spent $175,000 in the past six months on a single high-end lobbying firm in Sacramento, Mercury Public Affairs, and much more in Washington, D.C.

I am not accustomed to writing kind words about billionaires who own casino corporations that generate $14 billion a year. But on this issue, the mogul is on the side of Butler, if not the angels, although God only knows his motives.

Adelson is funding a group called Coalition to Stop Internet Gambling. Abboud promises to spend "whatever it takes" to spread the word about the evils of Internet gambling.

Adelson knows about the cost of politics, having spent $92.8 million to elect Newt Gingrich or Mitt Romney as president in 2012. That didn't work out well for him.

But Adelson's consultants believe voters are predisposed to oppose online gambling and plan to start distributing ads this week, first on the Internet and later on cable and broadcast TV.

An early spot depicts a boy who says he got a tablet: "It's pretty cool. With Wi-Fi, I figured out how to get on gambling sites. ...

"What about all the money I'm losing? First, it's on my dad's credit card so we can always pay it back. Second, my brother's friend told me that since I'm too young to play, I don't think they're allowed to keep the money."

No campaign would be complete without a villain. Adelson has ads in the queue targeting PokerStars, an online gambling firm based on the Isle of Man that paid $731 million to settle a civil case brought by the federal government for operating illegally in the United States.

"If they get their way," one ad says, "gambling will be available in every home, every bedroom, every dorm room, on every phone, tablet and computer everywhere, 24-7. Targeting families, kids, the elderly."

Despite that $731 million unpleasantness, PokerStars hopes to secure an online poker license in California if lawmakers and Gov. Jerry Brown approve it.

To that end, PokerStars formed an alliance with large Los Angeles-area card rooms and the Morongo Band of Mission Indians, which operates a large casino east of Los Angeles and is a huge donor to state politics.

Former House Majority Leader Dick Gephardt represents PokerStars and was in the audience for the hearing the week before last, as were several former state legislators and ex-legislative aides-turned lobbyists who represent various gambling interests.

Adelson is hardly a David in this fight. But Goliaths seem intent on pushing legislation through this year that would legalize online poker, to the detriment of Californians who feel a compulsion to bet on losing hands.

In April alone, gambling interests, mostly casino-owning tribes, donated $426,000 to the two major parties, incumbent legislators and candidates. Of that, $139,000 went to members of the Assembly and Senate governmental organization committees, which have jurisdiction over gambling bills, campaign finance disclosures show.

"I'm very optimistic and sincerely hope we can get a bill out," said Isadore Hall, a Los Angeles-area Democrat who chairs the Assembly Governmental Organization Committee.

PokerStars and Morongo are lobbying for language that would ensure PokerStars could operate in California, its run-in with the feds notwithstanding.

"We've been a responsible and successful operator," said PokerStars spokesman Eric Hollreiser, an Isle of Man resident. The company has licenses to operate in 11 countries, including Germany, Spain, France and Estonia.

Any legislation would authorize more than one gambling portal. But PokerStars has a list of millions of active gamblers, a highly valuable asset that could give it and its partners a competitive advantage.

There are many theories why Adelson opposes online gambling. It would be competition for his casinos, though given its revenue, Sands could own online poker if it wanted.

Abboud says it's all about the future.

Pulling his cellphone from his coat pocket, Abboud told the legislators who stayed late at the hearing: "The thought of turning every single one of these into a casino bothers us. It is a vice. It doesn't need to be everywhere."

Abboud doubts online poker will be a golden goose for gambling companies, or for the state, which sees it as a sources of tax revenue. So entrepreneurs soon would seek approval for more profitable games including slot machines, the most addictive form of gambling.

Maybe part of Adelson's opposition is personal. The octogenarian is married to a physician who is an addiction specialist, and they have young kids who, like many kids, know their way around computers and smartphones.

Abboud points to gambling sites based offshore that have cartoon themes. That suggests they're marketing to kids in the same way R.J. Reynolds used Joe Camel drawings to sell teenagers on smoking.

Internet proponents claim they will be able to filter out kids. Any parent knows kids are far more adept at navigating the Web than the rest of us. Certainly, no algorithm can spot an online gambler who is too drunk to stop betting before losing rent money.

Just as plaintiffs' attorneys went after the tobacco industry, Abboud predicts, class-action lawsuits against the gambling industry if Internet wagering expands. So there is a good business reason to leave money on the table.

Whatever Adelson's reasons, the gambling mogul has found old-time religion on online gambling. That's worthy of praise.

Follow Dan Morain on Twitter @danielmorain.