May 19, 2013
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The bill would allow investor groups to bet as a single entity much in the way hedge funds pool their money. Proponents of SB346 say it could bring millions of dollars in sports wagering to Nevada, money that now is bet illegally in the 49 other states where such gambling is forbidden.
While that sounds like a dandy idea on the surface, it would change a fundamental element of Nevada law. And although its backers say safeguards could be put in place to ensure transparency, multiple law enforcement sources and Nevada Gaming Control Board Chairman A.G. Burnett are concerned that just the opposite might be the case.
It might bring money, but it almost certainly would bring heat in the form of increased law enforcement scrutiny of the states sports gambling industry.
Heat is something one of SB346s key proponents, Cantor Gaming, knows something about these days. Cantor Gamings Lee Amaitis, who spoke on behalf of the bill at last weeks Senate Judiciary Committee hearing, arched eyebrows in the sports book industry when he touted his friendship with mega-sports bettor Billy Walters in a 2011 60 Minutes broadcast. The entity betting idea is not new to Walters, and Amaitis is a hedge fund expert and former CEO of Cantor Fitzgerald.
But I’m not sure he would put up a line on whether his sports book outfit will be allowed to continue to place satellite-betting kiosks in bars across the state.
The spread of those kiosks will cease if Senate Bill 416 runs to daylight at the Legislature and becomes law.
Asher offers an articulate argument against what he calls the anti-competitive bill being pushed by lobbyists for the Nevada Resort Association. And if the playing field of Nevada gaming were ever level, he might have an unbeatable argument capable of transcending even Carson City politics.
One of my favorite media misimpressions on this issue is that it’s basically a Big Guys vs. Little Guys matchup, a ’27 Yankees vs. the Bad News Bears sort of thing. William Hill is not some unsophisticated hayseed but the planet’s largest sports wagering company.
Putting a 24-hour casino in every home comes with great responsibility. Ensuring a safe, responsible gambling experience should be of paramount importance. Online gambling companies talk incessantly about revenue, but it is everyone’s responsibility–from regulatory bodies to operators, from governments to the citizens themselves–to require that all proper consumer protections and safeguards are in place before online gambling can go live. It is imperative that all stakeholders in online gambling be well versed not just in its benefits but in its pitfalls as well.
Perhaps one of the most dramatic illustrations of what happens when a gaming company puts revenue before responsibility is the case of Terrance Watanabe who is reported to have lost most of his personal fortune recklessly gambling in Las Vegas. According to an article in the Wall Street Journal published December 5, 2009, “During a year-long gambling binge at the Caesars Palace and Rio casinos in 2007, Terrance Watanabe managed to lose nearly $127 million. The run is believed to be one of the biggest losing streaks by an individual in Las Vegas history.” While Steve Wynn is reported to have barred Watanabe from his casino for compulsive gambling, Harrah’s Entertainment Inc. welcomed him and derived 5.6% of its Las Vegas gambling revenue from him that year.
This case showed such an egregious lack of sound business judgment on the part of Harrah’s, now Caesars Entertainment, that the company was fined $225,000 by New Jersey regulators in March of this year. Gary Thompson, Director of Corporate Communications for Caesars Entertainment said, “Because of the confidential settlement agreement we reached with Watanabe, neither he nor we can make any official comment.” However, he points out that Caesars hired an outside agency to investigate the situation and made procedural changes deemed necessary to prevent recurrences.