The Fight … Sheldon Adelson and the Double Standards of Online Gambling

Sheldon Adelson

Sheldon Adelson has declared war on online gambling in the United States, using self-created surrogates like the Coalition to Stop Internet Gambling to sensationalize online gambling and craft incendiary and fallacious claims.

Adelson’s proxies have accused online gambling sites of being rife with money launderers and catering to underage and problem gamblers, claims they cannot back up with facts. Actually, the facts show that it may be Adelson’s kingdom, the land-based casino industry, where these problems are far more prevalent.

The scaremongering claims spouted off by Adelson and his coalition are quite hypocritical and little more than double standards.

Here’s the rub: It’s easier to detect problem gamblers, detect underage gamblers, and to prevent money laundering at online casinos than in a brick and mortar casino, and here is why.

The most hypocritical of hypocrisies

The most blatant of Sheldon Adelson’s hypocrisies is his opposition to online gambling on moral grounds, while at the same time running the most successful casino operation in the world.

Because of this fascinating point of view when it comes to morality, whether Adelson believes online gambling to be a scourge on society or not makes little difference. The very idea that a casino mogul would oppose online casinos on moral grounds rings false to the masses.

What Adelson sees as a moral objection, his detractors see as a clear case of Adelson protecting his business interests, which is something most mainstream media outlets and columnists have focused on.

Nobody is buying what Adelson is selling.

For a moment let’s set aside the absurdity of a casino magnate who is opposed to online gambling on moral grounds, and instead look at some of the individual claims that are being leveled against online casinos by Adelson and company, starting with the tall tale that online gambling sites are perfect environments for terrorists and money launderers.

Double standard No. 1: Money laundering

Adelson and his Coalition to Stop Internet Gambling (CSIG) have tried to link online gambling to money laundering and by extension terrorism. The leaps in logic needed to get to this point stem from an out of context passage from a 2013 statement from the FBI Adelson and his cronies love to use. A passage they claim indicates the FBI believes money laundering and online gambling go together like peas and carrots.

Here is what CSIG and Adelson claim the letter from the FBI says:

“In a September 2013 letter to Congress, the FBI warned that while many industries are vulnerable to money laundering, Internet gambling goes a step further by providing an anonymous forum for bad actors to move money undetected.”

And here is what the actual letter states:

“Money launderers are resourceful and find innovative ways to exploit any medium available to launder illicit funds. Even well-regulated entities, such as US banks, are commonly unwitting conduits for money laundering. Similarly, physical casinos remain popular venues for money laundering, despite regulation and the implementation of anti-money laundering and compliance programs. Online gambling, therefore, may provide more opportunities for criminals to launder illicit proceeds with increased anonymity. Individuals may use a wide array of mechanisms to conceal their physical location, or give the appearance of operating in a different jurisdiction, when accessing a website. Many of these methods could be detected and thwarted by a prudent online casino, for example, by blocking software designed to enable online anonymity. However, some sophisticated methods would be difficult to readily identify or deter.”

It should be noted that this statement by the FBI was written at the request of Congressman Bill Young and was not sent out as a warning that these situations are occurring, or that these activities are even on the FBI’s radar. The FBI clearly states that these are the possibilities.

Now you might think that Adelson’s hypocrisy on this issue ends with, “Physical casinos remain popular venues for money laundering,” and that his group is purposefully overstating the FBI’s remarks, but there is more.

The reason this is such a hypocritical argument is because back in August of 2013 Sheldon Adelson’s Las Vegas Sands Corp. reached a $47 million settlement stemming from a money laundering case that involved Zhenli Ye Gon, a Chinese businessman with alleged ties to a Mexican drug cartel who gambled some $126 million at Adelson’s Venetian and Palazzo casinos in 2006 and 2007[1].

The Sands Corp. called Ye Gon “the largest all-cash, up-front gambler the Venetian-Palazzo had ever had to that point.” But his play triggered no alarm bells.

Does Sheldon Adelson believe that hundreds of millions dollars can be laundered online just as easily, without so much as an eyebrow raised?

Double standard No. 2: Underage gambling

The latest rhetoric being spouted by Adelson’s troops is how easy it is for underage players to gain access to online gambling sites.

This is actually a terrific argument … if you were arguing in favor of legalization and regulation that is, since unregulated offshore sites have very few checks in place to prevent underage gamblers from playing, whereas licensed sites use the same age and identity verifications as banks and credit cards.

So how would this underage gambling occur on a regulated poker site?

In their own words, CSIG explains (via a YouTube PSA video) how all a teenager needs to do is commit not one but two felonies (identify theft and credit card fraud), and (because two felonies wouldn’t be enough to pull this off) the teen would also need to have parents who are blissfully unaware of not only what their child is doing, but for this to last more than a month they would have to not check their credit card statements, and the father cannot log into his online poker account.

I believe the plot to “Oceans 11” was a simpler, and I haven’t even made it to the double standard yet, because you guessed it, while there hasn’t been a single documented instance of an underage gambler playing at a licensed online poker site in New Jersey, Delaware, or Nevada, land-based casinos have had plenty of these occurrences.

Sheldon Adelson’s Sands Bethlehem Casino in Pennsylvania alone has been fined hundreds of thousands of dollars since it opened in 2009, thanks to at least 22 documented instances of underage patrons gaining access to the casino floor, where they were not only allowed to gamble, but some were also served alcohol[2].

This isn’t to say it can’t happen, or hasn’t happened online, but it seems to be a far bigger problem in land-based casinos.

Double standard No. 3: Problem gamblers

One of the first mantras of the anti-online gambling crowd was the somewhat juvenile “Click a mouse, lose your house,” aphorism coined by Representative Jim Leach (R-IA) in 2008.

This is a rallying cry that certainly sounds good on the surface but has little grounding in the world I live in, a little place called reality.

Consider for a moment that online poker rooms have strict daily, weekly, monthly, and/or yearly limits on deposits, which also works against their money laundering claims. Not to mention licensed online gambling sites must report potential problem gamblers based on betting patterns; betting patterns that are 100 percent logged and tracked, unlike in a land-based casino where your wagers are little more than guesstimates.

Furthermore, you can lose quite a bit more money in a land-based casino, just ask Mr. Ye Gon, who likely lost millions of dollars while he was allegedly laundering funds through Adelson’s casinos.

Or how about the story of Nellan Quigley, who embezzled $1.8 million from her New Jersey-based company because of a gambling problem[3].

What online site was Quigley “losing her house” and the houses of her employers at?

Actually it was the Sheldon Adelson owned Sands Bethlehem Casino in Pennsylvania where Quigley went rogue with her company’s money. According to the reports, Quigley’s Sands Player Club Card (which a casino uses to track a player’s bets) showed a loss of $770,965 over a 16-month period according to the article.

Again, there was no accountability by the Sands, who saw nothing wrong with Quigley’s betting patterns. So Quigley wasn’t caught because the Sands Bethlehem reported her potential problem gambling betting patterns, she was caught when her employer noticed the missing funds.

 



[1] Money.CNN.com August 27, 2013 Las Vegas Sands resolves laundering case with $47 million deal

[2] Pennsylvania Gaming Control Board

[3] LehighValleyLive.com April 4, 2014 Police: N.J. woman stole $1.8 million from Pennsylvania workplace, lost $770K at casino

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May 2014