When Internet gambling launched in New Jersey last year amid hopes that the endeavor would reverse declining casino revenues, the movement also birthed a well-financed campaign threatening to halt online wagering across the country.
Las Vegas gambling mogul Sheldon Adelson announced his campaign days before online gambling went live in New Jersey, marking the largest expansion of Internet play in the U.S. His efforts through the newly created Coalition to Stop Internet Gambling, backed by political heavyweights including former New York Gov. George Pataki, have drawn increased media attention in recent weeks with a letter by the FBI warning that online gambling could be used as vehicle for money laundering.
Locally, industry experts say, the battle is likely to wage on for some time. They acknowledge the campaign has the potential to threaten New Jersey’s burgeoning industry.
Draft legislation circulating in Congress calls for reversing the U.S. Department of Justice’s 2011 determination that the Federal Wire Act allows states to adopt Internet gambling as New Jersey has. The Associated Press has reported that the bill originated with Adelson’s group but has yet to find sponsorship.
“My guess is that this is a story that will be followed for years to come,” said Israel Posner, director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Richard Stockton College.
Adelson’s group is circulating a letter calling on attorneys general across the country to support an online gambling ban.
Meanwhile, other groups, including the Poker Players Alliance, have begun to fight back. Alliance Executive Director John Pappas said the group has been working on a grassroots campaign encouraging states to ignore the letter. More than 10,000 tweets and 10,000 emails were sent to attorneys general in its first week.
“We’re talking about something that would turn back the clock on states like New Jersey,” Pappas said. “I’m stunned that this is a position that any attorney general would take. It essentially endorses a federal power grab to come in and tell states what they can and cannot do.”
In New Jersey, some have regarded the state’s launch as underwhelming, bringing in $8.4 million in revenue from the Nov. 21 soft launch through December. Others, including casinos, have cautioned that those numbers reflect a market that hadn’t yet begun strong advertising campaigns as operators were waiting to ensure their products were operating well.
A new study released this week by the Levenson Institute shows that roughly 2.5 percent of New Jersey gamblers have tried Internet gambling. Meanwhile, 7.2 percent intend to try it this year, and another 3.5 percent aren’t sure if they will try gambling online.
“That means you’ve got more than 10 percent potential even before the casinos have done serious marketing,” Posner said.
Ten states have signed on to Adelson’s letter so far. Not surprisingly, the letter has not gained support from New Jersey, Nevada and Delaware — the three states where some form of online gambling has been legalized.
“As an organization of players, we’re doing what we can to present another side. That’s something that no amount of money from Sheldon or anyone else can match,” Pappas said. “I’m not surprised his efforts have picked up traction. You can certainly buy a lot of things with several million dollars.”
The newly created website for the Coalition to Stop Internet Gambling features a message that reads, “Click a mouse and lose your house.” The group warns that Internet gambling targets the young, poor and elderly and is irresponsible as it makes gambling available at all times of the day and night.
Proponents of online gambling argue that people will find ways to gamble online illegally, so a regulated market serves as the best consumer protection.
Meanwhile, in a recent column for USA Today, Pataki, the former New York governor who is co-chair of Adelson’s group, warned that “there are sophisticated technologies that can be employed by terrorist groups and criminal organization to move money undetected, conceal their physical locations, and entangle unwitting online players.”
The recent survey by the Levenson Institute suggests that New Jersey gamblers have their concerns, as well.
Those who had not tried Internet gambling were asked why they hadn’t gambled online, with nearly 35 percent of respondents saying that they don’t trust the practice is safe. That reason was followed by 26 percent of respondents who said they had not tried Internet gambling because they prefer other forms of gambling.
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