Friday, November 11, 2016

What Can I Get for, oh…$25 Million?

"Someday, and that day may never come, I will call upon you to do a service for me."

As you may know, Sheldon Adelson finally backed a winner in Donald Trump, putting somewhere near $25 million (or more) into his campaign.  And as you also might know, rich donors usually expect something for their largess.  Don’t take my word for it – the President-elect said so himself earlier this year about his own contributions:
“When you give, they do whatever the hell you want them to do.”

Face it; $25 million should get you something more than just double bonus miles. 
So one can expect that Adelson will want something in return – the questions are what and how much?  The “what” is easy – his top three issues (in my opinion) would be
  • Israel – keeping US support strong
  • Marijuana – making it illegal (he’s been a strong opponent of medical marijuana regulation in Florida)
  • Online Gambling – ditto.
The “how much” pertains to whether he can get all three of his wishes granted.  The first one is a slam-dunk, as I can’t see the next Administration doing any less for Israel that is being done now.  So that’s one. 

The other two are the focus of my thought-experiment here.  There are plenty of similarities – both marijuana and online gambling are considered “vices” that are usually handled in by the states.  There are also legal issues unique to each that have surprising parallels.

Since Tuesday, there have been countless conversations asking pretty much the same thing:  “what does the election of Donald Trump mean to my industry?”  Online gambling has been one of them, with two recent op-eds in OnlinePokerReport and PokerNewsDaily painting a dire picture.  The marijuana industry has also taken note that despite the recent progress at the ballot box, it too may face radical changes.  See here, here, here and here.  California, Nevada and Massachusetts approved measures legalizing the recreational use of marijuana, while Florida, Arkansas and North Dakota voted to allow pot for medical purposes.  Currently there are eight states where recreational pot is legal, and 29 states and DC where some form of medical marijuana is allowed.

Trump has been on record that he thinks marijuana should be a state issue.  He’s also a former casino owner, so he obviously thinks gambling is OK, but his views of online gambling are less known.  And as Adelson proves, one can be pro-gambling yet anti-online-gambling.

In both gambling and dope, it’s not so much Trump position, as those who he would have in his cabinet, as advisors, and those currently in the GOP-controlled Congress.  Think Chris Christie and Rudy Giuliani.  And Sheldon.

Marijuana is still considered a Schedule 1 drug, and federally, it’s illegal.  Because it is, banking issues are the norm for marijuana distributors – it’s a “cash only” business, and they cannot take certain tax breaks available to regular businesses.

Yet marijuana has been a cash cow for states where it’s legal, shoring up revenue streams due to the inability to raise taxes on constituents.  Recent research shows that legalizing marijuana has actually decreased crime (kinda like “consumer protection,” eh?).

Does that last paragraph sound familiar to online gaming proponents?  Darn right it does.

Now the good news (for the marijuana industry) is that many in the industry think their position is pretty good to OK (few say “safe”).  With recent wins at the ballot box, nearly 1 in every 5 Americans lives in a state where some form of legalized marijuana.  Online gaming wishes it had those numbers.  So the only question I have is whether Sheldon gets one or two more wishes from the magic lantern.  If he’s greedy, he’ll try to get everything he can. 

Crap…I think we know how that’s gonna end up. 

Our only hope is our continued vigilance, and perhaps the hope that recreational and medical marijuana can continue to exist as states’ rights issues (and can continue to exist).  In that case, online gaming has a chance, too.  Otherwise, we’re in for a really bad beat.

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