After AGA Letter About Illegal Gambling In Pennsylvania: Why Is Online Gambling Different?

The head of the American Gaming Association recently wrote a letter to the editor to a Pennsylvania publication saying why illegal gambling is a problem in the state and elsewhere. That point, however, brings up another question: Why does the AGA rail against illegal live gambling, but doesn’t push for regulation of the online gambling space?

What the AGA’s head said

Geoff Freeman, president and CEO of the AGA, recently penned a letter to the editor, in a response to another letter that called out Pennsylvania for cracking down on illegal gambling operations just to protect the state’s sanctioned and legal gambling offerings.

Here’s the conclusion from Freeman’s letter, which lays out an argument of why resources should be dedicated to stopping illegal gambling:

Pennsylvania’s legal gaming industry is based on a foundation of integrity — something that is sorely lacking in the multibillion-dollar illegal gambling sector. We’re committed to working with law enforcement to expose illegal gambling, protect consumers and restore the revenue and jobs lost to shady, predatory operators.

Freeman’s argument is certainly sound. And it is consistent with the AGA’s recent push nationwide to crack down on illegal gambling. The only problem? It’s not actively trying to facilitate a “foundation of integrity” in the online gambling realm.

The AGA’s double standard on gambling?

The issue is this: If the AGA agrees that legal and regulated gambling is good for the brick-and-mortar business, why isn’t it lobbying for the same in online gambling?

Yes, it is pushing widely against all forms of illegal gambling — online included. But authorities, after Black Friday in 2011, haven’t had the desire or the tools to stop a variety of online gambling and poker sites that still accept American players.

In an ideal world, online gambling could be stopped on its own. But preventing illegal gambling would be far more effective if jurisdictions could provide customers with a legal, regulated alternative — like they have in Nevada, New Jersey and Delaware. With no other alternative, American online gamblers go to sites that operate offshore.

AGA, neutral on iGaming

After once supporting online gambling regulation in the U.S., the AGA is now back to neutral — mostly to avoid a confrontation with Sands Corp. CEO Sheldon Adelson, who has been on a crusade to simply ban all forms of online gambling in the U.S.

A straight prohibition is unlikely to have any effect on the current illegal online gambling market; all it would really do is prevent future regulation and protections from cropping up in jurisdictions that do eventually want to allow internet gaming.

MGM Resorts CEO Jim Murren — who sits on the AGA board — has been more and more vocal in calling for online gambling regulation. From a recent interview:

People are gambling illegally online — Americans — right now.

We don’t know how old they are, we don’t if they can afford to do it, we don’t know where they are. We don’t know if they are actually going to get paid if they win something. We don’t know anything. And to think we can just ban this and that the problem goes away is ridiculous, it flies in the face of common sense.

It’s possible Murren will lead a turnaround for the AGA’s stance on online gambling — namely supporting efforts to regulate it — which would likely be the best way to combat illegal online gambling in the long run.