Potential Las Vegas NFL Stadium Complicates Sheldon Adelson’s Online Gambling Position

September 13, 2016
Potential Las Vegas NFL Stadium Complicates Sheldon Adelson’s Online Gambling Position

The arguments for a federal prohibition of online gambling (poker and casino games) were already tenuous enough.

But Sheldon Adelson’s attempts to lure the Oakland Raiders to Las Vegas with a massive new stadium seem to have wrapped the casino magnate into a logic pretzel when it comes to what he wants to ban.

Adelson is hoping to bring the Raiders to Nevada and also to acquire an ownership percentage of the team. He is arguing that his ownership of gambling establishments shouldn’t disqualify him from part-ownership.

In an interview with Yahoo Finance’s Dan Roberts, the following exchange occurred about potential ownership:

Dan Roberts: The general expectation is that if this works out, and the Raiders move, you will get an ownership stake in the team. Is that likely?

Sheldon Adelson: I am taking the risk to guarantee the completion of the stadium. I think it’s going to significantly help the value of the team, so I’d like to get some interest in it. But if I took an option on the team, the interest size of the option would have to be approved by the NFL.

What make this unlikely are the NFL’s longstanding policies prohibiting league owners from having ties to gambling. Adelson attempted to nip this in the bud by linking other owners to gambling in a somewhat creative way.

Adelson on DFS

To make his case about NFL teams already having gambling ties, Adelson brought up the topic of daily fantasy sports, which he says is gambling. Adelson pointed out two other NFL owners, Jerry Jones (of the Dallas Cowboys) and Robert Kraft (of the New England Patriots), who happen to own pieces of DFS companies.

In the interview with Roberts, Adelson had the following to say about DFS:

“I’ve met with Jerry Jones and I’ve talked to Bobby [Kraft]. Bob is the chairman of the committee for relocation in the NFL. He’s in favor of it. It’s an old wives’ tales that they [the NFL] say gambling is no good. I’ve read that 28 of the 32 teams have interest in fantasy sports. Well, that’s gambling. So 28 teams are involved in gambling.

“Listen, I’m in the business. I’m the largest company in the gaming business by market cap [That is correct — $4 billion at the moment] and I can tell you this: Daily fantasy sports is gambling. There’s no question about it. Anybody can play this, and they can gamble on it.”

The difference between gambling and casino gambling

Adelson’s argument — that if DFS can be involved with teams, then casino ownership shouldn’t preclude his NFL involvement — has a significant flaw.

The NFL has a policy prohibiting its owners from any involvement in casinos, but not gambling per se, although it’s highly frowned upon and considered an unwritten rule. One notable exception to non-casino gambling ties was the Rooney family’s Florida and New York dog and horse pari-mutuel tracks. (The family is the longtime owners of the Pittsburgh Steelers.)

As far as the actual policy, the NFL’s policy manual clearly mentions casinos, but not tracks (and certainly not DFS):

“no owner of an interest in a NFL club may own, directly or indirectly, any interest in any gambling casino.”

Somewhat ironically, the type of gambling in which Adelson is involved might be why he will be denied an ownership share in the Raiders. I say “ironically” because Adelson is himself against one form of gambling — online gambling — but obviously OK with land-based casinos.

The 800-pound gorilla in the room

In the interview, Adelson went on to describe DFS in much the same way he’s portrayed other forms of online gambling over the years. He described it as highly addictive; offering unfettered access to anyone, anywhere, anytime; and as unduly targeting and exploiting the poor, minors and problem gamblers.

This is entirely consistent with his prior comments about online gambling. The problem is, it’s inconsistent with how Adelson has treated DFS up to this point.

Fantasy sports are exempted from the proposed federal prohibition on online gambling, RAWA (the Restoration of America’s Wire Act), which is widely believed to have been introduced into Congress at Adelson’s behest.

Adelson is essentially trying to use the argument that “DFS is gambling” to make the case that he’s suitable to own a percentage of an NFL team. But at the same time, the federal online gambling ban he is championing exempts fantasy sports, essentially debunking his own claim that DFS is gambling.

To be consistent, Adelson would have to include DFS in his federal online gambling ban. That would almost certainly put him out of favor with not only Jones and Kraft, but the overwhelming majority of NFL teams (most of which have some type of arrangement with DFS companies).

That’s not to mention the NFL in general, which sees fantasy sports leagues and daily fantasy sports as extremely beneficial to the league.

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Will Adelson abandon his online gambling ban?

So where does this leave Adelson?

Assuming the NFL even entertains the notion of Adelson as an owner, he’s pretty much stuck between a rock and a (sort of) hard place.

The nearly $2 billion stadium proposal (which requires a massive $750 million subsidy from local taxpayers) and a potential ownership stake in the Raiders are much bigger targets than an online gambling ban.

I’m sure Adelson would love to accomplish both, but there is clear discord between the two; not to mention the online gambling ban has gained little traction in Congress.

As noted above, pursuing an online gambling ban with a DFS exemption pretty much destroys his argument for why he’d be a suitable NFL owner. At the same time, trying to ban DFS would put him at odds with pretty much every other owner in the NFL, a group that votes on the team’s move.

In my opinion, it’s doubtful Adelson would risk the stadium and an ownership percentage in an NFL team to continue pursuing his online gambling ban. If push comes to shove, look for Adelson to put the federal online gambling prohibition on the back burner — which puts his DFS contradictions out to pasture.

He’s unlikely to abandon it, but it’ll probably be on simmer until the Raiders situation is resolved.

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