What Is Sheldon Adelson’s Real Concern About Online Poker?

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What Is Sheldon Adelson’s Real Concern About Online Poker?

With an estimated fortune of $40 billion built on the back of his Las Vegas Sands casino business, many an analyst has observed the irony of gambling kingpin Sheldon Adelson preaching the sins of online poker to the rest of the American people. In fact, so pious has Adelson become that in spite of advocating dropping a nuke on Tehran to teach the Iranians “we mean business”, the 80 year old billionaire has now teamed up with Southern Baptist Lindsey Graham to clamp down hard on online poker.

Interestingly, The Southern Baptist Convention has regularly stated its opposition to the gambling industry and has condemned gambling as “immoral,” “harmful,” and “devastating.” In spite of a multitude of ethical differences, however, Adelson and Lindsey Graham have now  united in their dislike for online poker, leading truth seekers to wonder what the real reason is behind Adelson’s crusade against online gambling.

A moral issue?

Extolling his moral high ground, the man who suggested wiping out Tehran is apparently a pillar of ethics when it comes to gambling, sorry I mean online gambling. Preaching from his pulpit Adelson declared the following:

“My moral standard compels me to speak out on this issue because I am the largest company by far in the industry and I am willing to speak out. I don’t see any compelling reason for the government to allow people to gamble on the Internet and nobody has ever explained except for the two companies whose special interest is going to be served if there is gaming on the Internet, Caesars and MGM.”

Therein lies a possible clue as to Sheldon Adelson’s real motives. No, I’m not referring to his principled, high morals, but instead his desire to dominate the whole land-based casino landscape whilst also ensuring no new competition from online operators.

The Asian market

Las Vegas Sands Corp. (LVSC) has the largest market cap of any casino company currently valued at $61.93 billion. Since 1989 when Adelson and his partners bought the Sands Hotel in Las Vegas, the Jewish entrepreneur has been an astute businessman in guiding the company’s operations and has clearly grasped that the gambling industry is expanding in two main directions, namely Asia and the internet.

Having already positioned Las Vegas Sand as the biggest beneficiary of the Asian gambling market, Adelson is naturally also focusing on preventing his competitors from reaping any potential rewards from igaming expansion.

Adelson’s biggest competitor Caesars

Caesars Entertainment Corp may have been struggling since the recession, having failed to report a profit since 2009, but Sheldon Adelson’s biggest competitor does seems to be gaining a strong foothold in the USA’s nascent online gambling industry.

In the country’s biggest regulated market of New Jersey, Caesars Interactive/888 along with Borgata/Party Poker continue to dominate the industry, while in Nevada Caesars Interactive’s WSOP brand is considered the Silver State’s leading site. Therefore, it seems likely Adelson is keen to slow down the progress of his nearest rival by halting iGaming expansion progress, and thus cutting off a potentially valuable source of revenues for his competitors.

Las Vegas Sands, however, is flush with cash whilst Caesars is swimming in debt. Therefore, Adelson probably sees a golden opportunity in getting in the way of Caesars’ new igaming venture, and as Matt Kaufman points out in his quadjacks article entitled Sheldon Adelson’s Real Agenda:

“If Adelson’s opposition to iGaming manages to slow down the industry to the point that Caesars is legitimately hurt by it, it may even prevent them from competing with him in the convention business which has done so well for him. Any corporation would prefer to hold an event at a frequently-upgraded Sands convention center compared to Caesars properties which without influxes of cash will be in need of renovations.”

Adelson aims to maintain stranglehold on gambling industry

According to a recent analysis by onlinepokerreport, a resurgence of online gambling in the USA could very well give the whole gambling industry a huge boost. Nevertheless, such a scenario would most likely want to be avoided by Adelson who currently enjoys a stranglehold on the entire business.

Backing up its claims, the article noted that, “During the three year run from late 2003 through 2006, online poker sites and online casinos were busier than ever, and so were brick and mortar casinos, which seems to indicate that the success of one industry does not come at the expense of the other.”

In actual fact, the evidence suggests that land-based casinos benefit enormously from online gambling sites, which offer new players a cheap means of trying out online gambling games without first having to head directly to the intimidating atmosphere of a land-based casino.

Conclusion

As well as those points already discussed, there are likely a number of other reasons for Sheldon Adelson’s opposition to internet gambling which have yet to be touched upon. The pro-iGaming community therefore needs to carefully establish his real motives in order to more effectively counteract Adelson’s expansive lobbing efforts.

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