Schuetz: A Round Of Dealer’s Choice

“The difference between fiction and reality? Fiction has to make sense.”

— Tom Clancy

In this column, I’ll be bouncing from topic to topic, writing about this and that, sharing random thoughts, musing over stuff I don’t understand, and remarking on things I find funny.

Responsible … to a point

We just completed another September, celebrating Responsible Gaming Education Month. The American Gaming Association (AGA) leads the industry in celebrating this initiative because it is deeply concerned about adverse health outcomes resulting from a destructive relationship with gaming and believes that this issue warrants attention for one whole month each year. 

It is ironic to note that the AGA apparently has no problem with the adverse health outcomes from smoking in casinos. That seems interesting in that research indicates that there is a noteworthy overlap between problem gamblers and smokers. So, the industry is only too eager to extend a welcome mat to smokers, as it helps operators capture that highly valuable problem gambler customer segment. 

During Responsible Gaming Education Month, one thing that is not part of the education package is the reality that being present in a smoking environment damages people’s health, causes cancer, heart disease, and numerous other health issues — oh, and shortens people’s lives. Wonder when the AGA will celebrate a month for them?

No DEI at the UAE Gaming Authority

Have a look at this graphic:

There is a four-to-three split between those males with hair and those without, and I suppose that is diversity. It’s heartening to see how we spread American values globally through our business ventures.

New York, New York

The never-ending casino hunt in New York stumbles along, and one thing is clear: The character, honesty, and integrity of the operators appear to be unimportant.

If one of the conditions for eliminating an applicant in New York was that they had recently paid massive fines to gaming regulators or the federal government for money laundering and related offenses, both Resorts World and MGM would be in trouble. Apparently, New York is not concerned with such things.

Great, another gaming lobbying entity

The gaming industry has long been represented by the AGA for its lobbying activities. When Geoff Freeman took over AGA leadership in 2013, Las Vegas Sands owner Sheldon Adelson was alive and reasonably well, and he was hell-bent against online gaming. At the onset of his tenure, Freeman, seemingly seeking to retain his job and not piss off Adelson, was also opposed to online gaming.

In fact, Freeman was against online gambling until he was for it. This resulted in the AGA representing firms in the brick-and-mortar space and the online space.

Recently, the Responsible Online Gaming Association (ROGA) was formed to address the needs of the online gaming operators as a separate and distinct entity from the AGA.

It seems that ROGA should immediately meet one of its goals of educating consumers on problem gambling by explaining to them that the brick-and-mortar casinos that allow smoking are death traps for the guests, the employees, and regulators. They should work to clarify that no state can expect its regulators, who are state employees, to accept the well-known health risks associated with working in a hazardous environment. Given that there is no question about the risks related to inhaling second-hand smoke, they should demand that casinos immediately be ordered not to allow smoking.

This would be a bonus for the online community, as it would force the highly sought-after group that is smoking problem gamblers to shift their play from the brick-and-mortar environment to the online space. This would be a significant revenue boost for the online folks in states like New Jersey, which allows smoking in casinos (but not outside). Additionally, the players would not be harming other guests, casino employees, or regulators. They would just be endangering their family members, and most unfortunately, their pets.

By the way, since I am discussing lobbying groups like the AGA and ROGA, it is essential to note that Gallup consistently finds lobbyists to be the lowest-ranked profession in the U.S., as judged by honesty and ethics.

Welcome to the Hall of Fine

If they had a Regulatory Fine Hall of Fame, it would be an interesting crowd.

The largest fine to date levied by the Nevada Gaming Commission was against Wynn Resorts, amounting to $20 million. This was a result of the company not reacting to sexual harassment allegations against Steve Wynn. Moreover, Mr. Wynn was fined $10 million for his personal conduct while chairman of the company. He stepped down as CEO and chairman as a result of multiple accusations of sexual misconduct.

Donald Trump had personally appointed Wynn as the head fundraiser of the finance committee for the Republican National Committee. Wynn resigned from this position as a result of the media storm brought on by the allegations of his inappropriate sexual behavior.

Before Wynn, the record for largest fine paid for gaming regulatory failings in Nevada was held by CG Technology, at $5.5 million. This company was founded by Howard Lutnick, who is presently serving as U.S. Commerce secretary, appointed by President Trump.

To complete this trifecta, the largest fine ever imposed on a casino for many years in Atlantic City was against Trump Taj Mahal.

If a person is struggling with fines by gaming regulators, the place to turn appears to be politics.  

Who you gonna call?

The 1-800-GAMBLER events of late have absolutely convinced me that there are few adults in the problem gambling space. I think every gaming state should publish a warning on all gaming advertisements that the supposed adults who receive real money to help people suffering from gambling problems have totally lost the plot.

But don’t ask me how to contact them, for it is too confusing.

Why not hire mannequins for compliance committees?

MGM International had some impressive people on its compliance committee. They were well-trained in law and/or regulation, while unfortunately apparently understanding little if anything about the reality of a casino floor.

And how did that work out? Terribly. 

By many accounts, the MGM Grand casino was out of control, with the inmates running the asylum for a considerable period. The point is that those fancy bios in law and regulation were largely ineffective. I would suggest they need to find some bodies that have spent time on a casino floor, and I don’t mean walking to the restaurants.

The compliance committees you see in gaming are like the consultant who says he knows 200 ways to make love and who has never been on a date. How much more embarrassment does regulated gaming want?

As an added note, please refrain from placing members of the University of Nevada system on casino boards and/or compliance committees. When a casino company places a noted Nevada academic on a board or compliance committee, they are renting the perception that the person is educated and possesses integrity. Such was the case when MGM placed the original UNLV Law School Dean Richard Morgan on the compliance committee. They even had him testify before the commission.

Then, however, when it was discovered that MGM was essentially out of control in terms of compliance for an extended period, forcing the feds to intervene and regain control, one wondered what the compliance committee was doing. This type of incident can then reflect poorly on the university when a casino like MGM Grand is humiliated for its lack of compliance.

No such thing as a conflict of interest in Nevada

Jim Murren, the past chairman and CEO of MGM Resorts International, gained global notoriety when he attempted to sue the survivors and the victims of the Route 91 Harvest festival mass shooting that took place from an MGM Resorts hotel property into a concert venue also under the control of MGM Resorts. One can only imagine what it must feel like to consciously agree to sue the victims and surviving family members of the people killed in the largest mass shooting in the United States. It must warm the cockles of the heart for the true company man.

Following this, Murren resigned from MGM before the expiration of his contract. Since then, he has accepted several roles. One was that he became chairman of the General Commercial Gaming Regulatory Authority of the United Arab Emirates. This entity has approved one casino license, and that was for Wynn Al Marjan Island, a $5.1 billion project that many argue may be one of the most profitable casinos in the world.

He has also been named as chairman of the Board of Directors of Resorts World, Las Vegas. At the same time, Alex Dixon was appointed CEO. Dixon lasted in the role slightly more than four months.

It is also interesting to note that Resorts World Las Vegas and Wynn Las Vegas operate in the same neighborhood in Las Vegas and are competitors. Furthermore, Wynn and Resorts have been involved in litigation related to design issues. It is also the case that Wynn Las Vegas and Resorts World Las Vegas were involved in an incident regarding a dispute with a high roller that involved the use of outdoor signage.

The point is, it is incredibly unusual for the chairman of the board of a major casino also to be the chairman of the regulatory body that oversees a critically important casino belonging to one of its main competitors.

Don’t look, and you won’t see

I’m old enough to remember the days when firms did due diligence on their partners and regulators investigated licensees.

BetMGM, LLC was formed in 2018 as a joint venture between MGM Resorts International and Entain, plc. Since the JV, Entain has been subject to significant scrutiny related to allegations of bribery and corruption. These activities have brought on substantial financial penalties, as well as a serious effort by the UK Crown Prosecution to file charges against numerous past executives. Also of interest, a well-known and respected U.S. gaming executive was recently appointed as the company’s new head, replacing CEO Jette Nygaard-Andersen, who had held the role since 2021 and left the company abruptly in 2023.

The fact that the honorable Gavin Isaacs left Entain with immediate effect after five months should be considered a significant data point, and quality regulators should see this as a blinking red light. That is, of course, if any quality regulators are around and interested in such things.

The point is, the legal history of Entain is a train wreck, and one wonders how all of these great regulators in the U.S. and the due diligence folks at MGM seemed to miss all that.

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Richard Schuetz entered the gaming industry working nights as a blackjack and dice dealer while attending college and has since served in many capacities within the industry, including operations, finance, and marketing. He has held senior executive positions up to and including CEO in jurisdictions across the United States, including the gaming markets of Las Vegas, Atlantic City, Reno/Tahoe, Laughlin, Minnesota, Mississippi, and Louisiana. In addition, he has consulted and taught around the globe and served as a member of the California Gambling Control Commission and executive director of the Bermuda Casino Gaming Commission. He also publishes extensively on gaming, gaming regulation, diversity, and gaming history. Schuetz is the CEO of American Bettors’ Voice, a non-profit organization dedicated to giving sports bettors a seat at the table.