Adelson Casino Lobby Behind U.S. Decision to Limit Online Gambling

Justice Department's arguments suspiciously close to lobbying group's, WSJ reveals ■ Adelson claims opposition based on ethical considerations, not his corporation’s stand

File photo: Sheldon Adelson watches a traditional lion dance during the opening of the Sands Cotai Central resort in Macau, China, April 11, 2012.
Jerome Favre/Bloomberg

For over a decade, one of America’s biggest gambling magnates has waged a campaign against the legalization of online gambling in the United States. Casino owners wield great clout in the United States, contributing huge sums to mainly right-wing politicians, which is why this means of gambling has been blocked repeatedly. 

Following intervention by the World Trade Organization in 2007, the U.S. Justice Department ruled in 2011 that online gambling unrelated to sports betting does not violate federal law.

Last week things changed, with the Justice Department reversing its earlier decision, and the new version restricts all online gambling – and not only sports betting – based on a loose interpretation of the prohibition on interstate gambling. This new ruling has been supported by the casino lobby, which has contested the previous decision. 

Behind the lobby stands Sheldon Adelson, the CEO of Las Vegas Sands Corporation, one of President Donald Trump’s biggest donors and a vehement opponent of online gambling. The Wall Street Journal revealed that the legal arguments used by the Justice Department were suspiciously close to those used by the lobbying group.

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In April 2017, one of Adelson’s lobbyists sent a memo to the Justice Department, arguing that the 2011 decision was mistaken, said the Journal. This memo reached the office of then-Attorney General Jeff Sessions, which issued the new ruling.

The Justice Department acknowledged that changing its position was irregular, but denied that Adelson or others had any influence on the matter. However, sources in the Justice Department told the Journal that they had a legal analysis prepared for Adelson’s team by the law office of Charles Cooper, a former senior official in the Justice Department under Ronald Reagan. 

The new decision is a big victory for Adelson, who has invested millions of dollars in his campaign against online gambling, which competes with Las Vegas Sands and its casinos, located in Las Vegas, Macau and Singapore.  The corporation’s revenues amounted to $13 billion in the year ending in September 2018, with Adelson’s estimated assets climbing to $32 billion.

Adelson stands out among casino owners in his opposition to online gambling, with other owners wanting a slice of the online pie. For many of them, such as in Atlantic City, online gambling is a major contributor to their bottom line.

Adelson claimed that his opposition was based on personal and ethical considerations and did not reflect his corporation’s stand. He said that online gambling posed a social threat, dangerous for poor people, children and people who are vulnerable to exploitation.

The struggle against online gambling was a difficult and bitter one. In 2007, the United States lost a legal battle against Caribbean countries that argued that the United States was being protectionist in prohibiting such gambling. In 2006, such gambling was completely prohibited in the US, but the Democratic victory in 2009 reversed this development. In 2014, Republican congressmen promoted legislation against online gambling, with Adelson contributing $100 million to election campaigns of Republican candidates.

The new Justice Department decision says that the previous one was made in error, but its constitutionality is sure to be challenged in the courts.