By Professor I. Nelson Rose
The gaming industry won most of its battles at the ballot box, but lost the public relations war.
In Maryland, voters passed Question 7, 52% to 48%. This will not only allow the five previously authorized slot casinos to add table games, it also permits a giant sixth Las Vegas-style casino, right next to Washington, DC. MGM’s Prince George’s County casino will have as many as 3,000 slot machines.
Rhode Island voters approved adding table games to the slot halls at Twin River and Newport Grand, giving the state two full-scale casinos. Geneseo, Illinois, voters narrowly recommended the city have video gaming.
Oregon again voted against privately owned casinos. But that is mixed news, since it would have meant competition to the state’s Indian casinos.
The continuing Democratic majority in the US Senate means Nevada casinos keep one of the best friends they have ever had, Harry Reid (D.-NV), as majority leader. Tribal gaming also keeps its friend, Barack Obama, as president, and added individuals like Heidi Heitkamp (D.-ND) to the upper house. For Internet gaming, die-hard supporter Barney Frank (D.-MA) may have retired, but so did opponent Jon Kyl (R.-AZ).
All of these successes pale in the face to the major p.r. hit casinos took in the media on 6th November and the days that followed. The fault lies primarily with two individuals: Donald Trump and Sheldon Adelson. But Steve Wynn and Penn National Gaming also did their share to hurt gaming’s reputation.
There is not much to say about Mr Trump. I have to admit that I used to admire him. I have taught law school classes in negotiating, and I respect not only his skill but his willingness to do whatever it takes to win. When one of his Atlantic City casinos went bankrupt, he threatened the bondholders to tie up the proceedings in messy litigation for years. He knew as an equity holder he had almost no legal rights. But he also knew the lenders were big investors from Japan, who would do anything to avoid having their names dragged into a public fight. So, they let Mr Trump keep his name on the casinos, and gave him shares in the new business.
Similarly, I often work as a consultant and expert witness. This means getting people to know my name, so they will hire me. Until recently, no one could compete with Mr Trump when it came to self-promotion.
But his lack of restraint led to headlines like this:
• “Trump calls for revolution, blasts Electoral College.”
• “Donald Trump goes berserk on election night.”
• “Donald Trump Wins Election Night’s ‘Most Unhinged Conservative’ Award.”
NBC reporter Brian Williams said, on-air, “Donald Trump, who has driven well past the last exit to relevance and peered into something closer to irresponsible here, is tweeting tonight.” Mr Trump’s response led to new headlines: “Donald Trump Twitter Tirade Continues with Criticism of Brian Williams.”
Mr Trump was most upset that Barack Obama appeared to have won the electoral college but not the popular vote. Mr Trump had not complained in 2000, when George W. Bush was elected president with fewer votes than Al Gore. Common sense would have told Mr Trump to wait until the votes from the West Coast had been counted: Mr Obama beat Mitt Romney by more than 3 million votes.
The continuing Democratic majority in the US Senate means Nevada casinos keep one of the best friends they have ever had, Harry Reid (D.-NV), as majority leader.
Fortunately for the gaming industry, Mr Trump is so well known that most stories never mentioned his casinos. Not so with Sheldon Adelson.
Mr Adelson bet very big on Mr Romney and other conservative Republicans in nine Senate races. Many stories noted that the money he contributed in 2012 made him the largest political donor in American history. And every news report included his ownership of casinos.
All of his money was wasted, with the possible exception that the GOP kept the US Senate seat in Nevada. But it was more than thrown away: Mr Adelson actually campaigned against himself.
The owner of Las Vegas Sands started the year as the biggest backer of Newt Gingrich. There is general agreement that without Mr Adelson’s millions, Mr Gingrich would have dropped out of the primaries after his early losses. Instead, Mr Gingrich had the cash to run attack ad after attack ad against Mr Romney, focusing on his “vulture capitalism” at Bain Capital. This reinforced the image of Mr Romney that the Obama campaign was pushing. And it extended the primary fights, forcing Mr Romney to take extreme right-wing positions that were caught on tape.
Forbes lists Mr Adelson as the 11th richest American, and his political contributions show just how much money he has. Americans have trouble thinking about the difference between “million” and “billion.” I like the British terminology better, which calls the larger number “a thousand million.”
Mr Adelson has somewhere around $25 thousand million, give or take a few thousand million. This means he has more money than was spent by Messrs Obama and Romney and the Democratic and Republican parties and all independent groups on the presidential election—four times as much. Ironically, he probably made more money during Mr Obama’s presidency than any other individual. His LVS stock was at $5 a share when Mr Obama took office; it is now above $76.
Mr Adelson gave people like Mr Romney and Karl Rove about $53 million. This is an enormous amount, for an election. But not for Adelson. As a nice comparison, a couple of weeks after the election, Mr Adelson had LVS declare a special dividend, giving him about $1.2 billion. That’s $1,200 million; $53 million really is the size of a rounding error.
It is about two-tenths of one percent of his assets. If you own a home that is above water and have some money in the bank, you might be worth about $100,000. Donating 0.2% would mean just writing a check for $200.
The problem for the gaming industry is that it looks like it is filled with people with money to burn, and who have their own agendas at best, or who are divorced from reality at worst.
Howard Stutz wrote an “Inside Gaming” column in the Las Vegas Review-Journal entitled “Piles of cash, torrents of tweets and lots of crazy.” In it, he discussed not only Messrs Trump and Adelson, but also Mr Wynn’s constant attacks on President Obama.
Mr Adelson bet very big on Mr Romney and other conservative Republicans in nine Senate races.
Many stories noted that the money he contributed in 2012 made him the largest political donor in American history.
Mr Wynn characterized Mr Obama as a socialist, while praising Communist China. Here are the actual quotes: “The guy keeps making speeches about redistribution, and maybe we ought to do something to businesses that don’t invest, they’re holding too much money. We haven’t heard that kind of talk except from pure socialists.” “September will be our fifth anniversary in the People’s Republic of China in Macau, and we love it there. We are so grateful to be part of that market and to be allowed to participate in that community. We find the political environment, the regulatory environment, the human resource environment that we’re in to be absolutely delicious.”
Mr Stutz also wrote about Penn National Gaming’s over the top attacks on Maryland’s Question 7, which feared the potential competitors that would be created for its West Virginia casino. This included funding ads attacking legal gaming as creating compulsive gamblers and underage betting.
Elections matter. They not only determine who wins and how they will govern. They also focus the public’s attention on issues that they otherwise ignore.
It is important to win. But it is more important not to lose in a way that completely destroys your credibility forever.
© 2013, I. Nelson Rose. Prof. Rose is recognized as one of the world’s leading experts on gambling law, and is a consultant and expert witness for governments, industry and players. His latest books, INTERNET GAMING LAW (1st and 2nd editions), BLACKJACK AND THE LAW, GAMING LAW: CASES AND MATERIALS and GAMING LAW IN A NUTSHELL are available through his website, www. GAMBLINGANDTHELAW.com.