Adelson’s Capitol Hill puppet show

Rep. Jason Chaffetz (R) held another kangaroo court on Internet gambling and was in his best Sheldon Adelson-like Luddite form, scoffing at geofencing software. “It’s naive at best to think you can put a wall on the Internet,” said the willfully ignorant Chaffetz. At least the playing field was a bit more level than in Chaffetz’ previous media circus, held before the House Judiciary Committee. (When you can’t ram it through one committee, try another.) This time, New Jersey state Sen. James Whelan (D) got to have an at-bat in favor of Atlantic City‘s ‘Net-betting setup.

He got a pushback from South Carolina Attorney General Alan Wilson, “Regulation of online gambling has proven difficult at the state level [Says who?] and I anticipate that it will become increasingly difficult to effectively regulate such conduct as more and more states consider legalizing Internet gambling.” Then again, Wilson can’t tell the difference between video poker and Web poker, and thinks its legality in places like Delaware imposes it on states like his own, where it’s illegal. It’s amazing how people from jurisdictions with Internet gambling and no apparent acquaintance with it are so authoritative on the dangers it supposedly poses to Little Jimmy and his piggy bank.

Citing actual case history (novel idea!) from Delaware, New Jersey and Nevada, the Coalition for Consumer & Online Protection‘s Kristen Hawn said, “Law enforcement and child advocates across the country Chaffetzcontinue to voice their opposition to a national ban on online gaming for one simple reason: it would do nothing to curb illegal activity on the Internet, protect consumers, or prevent children from gambling online.” Hawn, who is admittedly as much a de facto representative of Caesars Entertainment as the smug Chaffetz is a puppet of Las Vegas Sands, added that the only way to really police online gambling was to keep it legal and well-regulated.

But if Hawn’s testimony is to be taken with a grain of salt, no such caveats need be made for former Nevada gaming regulator and state Sen. Mark Lipparelli. He dared House Committee on Oversight & Government Reform members to take a fact-finding mission to the Silver State and see how the pros regulate Internet gambling. Just in case Chaffetz couldn’t understand it, Rep. Bonnie Watson Coleman (D) presented visual aids demonstrating how geolocation works.

Chaffetz even encountered opposition from within his own caucus, when Rep. Mick Mulvaney (R) backed Wilson into a corner, asking him, “That sounds like you’re for federal control …. should the federal government also make Titusillegal that which other states have made legal?” Rep. Dina Titus (D) put the entire hearing in perspective when she called Chaffetz’s logic that Adelson’s bill strengthens states’ rights “jabberwocky.” HR 707 has even been carefully crafted to exempt daily fantasy sports, charitable gambling and horseracing (and, in the Senate version, online lotteries). So Chaffetz is exposed as picking winners and losers among the online-gambling industry. Does he realize he’s trying, in his ignorance, to legalize online prop betting?

With diminishing support among state attorneys general, we can certainly hope that we’ve heard the last of Restoration of America’s Wire Act. As casino expert Chris Grove calls it, it’s “a solution in search of a problem,” as yesterday’s snipe hunt so amply demonstrated. “As long as would-be bookies stay within this massive, ambiguously-defined safe harbor,” Grove concludes, “they’ll have little to fear from the primary weapon in the federal government’s arsenal for battling illegal sports betting.”

* You think slots on the Las Vegas Strip are tight? Try playing them in Iowa. While Silver State slots hold slightly more than 6%, Hawkeye State ones cling to 9% of coin-in. Given that fact, it’s rather staggering to read Iowa Racing & Gaming Commission administrator Brian Ohorilko state, “There’s no question the overall hold at Iowa casinos has declined the last 10 years.” Geez, how bad was it in 2005? Casino owners have the option of setting their hold as tight as 80%. Caesars Entertainment offers the worst value for players at its two Iowa casinos, while the Prairie Meadows racino has the most liberal slots. Saying “You buy what your customers want to play,” Caesars’ Jan Jones Blackhurst blamed players, saying Caesars bought the most popular machines, on which the holds are pre-set. (So if you don’t like the paytables, it’s your own fault, geddit?) If that’s the case, it’s no wonder customers are becoming disenchanted with slots and gaming revenues across the country are so stagnant.

* We’re almost in 2016 and there’s still no sign of the promised governmental-aid measures for Macao casinos. Instead, the central government is setting new restrictions on the use of the popular UnionPay cash-transfer system. Galaxy MacauCasino stocks got wind of this and immediately went into a minor swoon. Beijing has promised a nationwide audit of UnionPay, followed by sanctions if it doesn’t like what it finds. In particular, this could choke off one of the most popular ways Macao-bound gamblers use to get around currency-transport restrictions.

According to a UnionPay internal memo, the government wants to lower the boom on “fake commercial trades,” like the ones in casino pawnshops in which someone ‘buys,’ say, a wristwatch in order to obtain its value in cash. As analyst Vitaly Umansky wrote, “there is risk that greater scrutiny may be cast upon the unique Macau pawnshop business model in which cash transactions are recorded as goods purchases.” Already, Macao has ordered casino-based pawn and jewelry stores to remove their UnionPay terminals. One high-profile police raid has already been staged in Macao and it sounds like China could be gearing up for another, bigger one.

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