Caesars Chairman Gary Loveman Frustrated By US Online Poker Industry

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Tuesday, August 11th, 2015 | Written by Lucy Brown

The United States had a thriving online poker market pre-Black Friday, but the whole industry was deconstructed in 2011 to pave way for a market which could be regulated and taxed, rather than revenues being funneled into the pockets of unlicensed offshore operators. In 2013, Nevada then became the first US state to adopt iPoker regulation, with Gary Loveman, the Caesars Entertainment Corporation CEO and a staunch online gambling proponent, instrumental in launching the company’s online poker website, WSOP.com. In February 2015, Loveman subsequently stepped down from his post, although he is still chairman of the board, and talking recently with KNPR on Nevada Public Radio, expressed his frustration as to the slow pace of iPoker expansion in the country.

Lack Of Liquidity

Since 2013, no US states outside the regulated markets of Nevada, Delaware and New Jersey have adopted iPoker legislation of their own, and each year online poker bills continue to spring up and then founder in local state legislature. Initially, it had been hoped that the huge potential revenues generated by the country’s three regulated states might have encouraged others to enter the industry, but unfortunately post-regualation iPoker revenues have fallen far short of expectations, in the case of New Jersey by as much as 90%.

While Nevada and Delaware have since agreed to share their player pools, liquidity continues to be a huge issue for iPoker, and when asked why expansion seems to have ground to a halt, Loveman replied:

“I think it stalled in part because we don’t have a sufficient population of people from other states playing to make the offering as compelling as it needs to be. This is one of the great frustrations of the years I’ve been in this industry is that something that is so intellectually straightforward has been so difficult to execute.”

Industry Foes Thwarting Expansion

Gary Loveman also expressed great frustration at the way in which online poker opponents have held back the industry, and continue to spread the message that playing poker online is unsafe, despite the numerous measures currently in place. In the regulated markets, these include age and location verification checks for players, as well as safely holding customer funds in a segregated account away from the operator’s other money.

Nevertheless, anti-online poker advocates, such as Las Vegas Sands CEO Sheldon Adelson, have effectively spread fear that regulated online poker could result in children easily accessing sites, and in the longer run produce an upsurge in the rate of gambling addiction. Adelson even created the catchy motto “Click a mouse, lose your house,” and helped craft ‘The Restoration Of America’s Wire Act’ (RAWA), which seeks to ban all online poker from the US. Commenting on the issue, Gary Loveman said that “The idea that Americans cannot legally play poker online.. strikes me as almost crazy.”

Perplexed By Harry Reid’s Change Of Heart

Gary Loveman also took time to comment on Senate Minority Leader Harry Reid (D-Nevada) recent change of heart that has seen him align his views more closely with those of Sheldon Adelson. Pre-regulation, Reid had worked tirelessly to have online poker regulated in Nevada, but more recently suggested he could support a full online ban on the game. Commenting on Reid’s views on the topic, Loveman said:

“I respectfully disagree with the senator, with whom I have had countless conversations on this topic. I think that the world is one where virtually every transaction or decision is now mediated through a digital interface on some type of mobile device and the notion that the one thing you can’t do is to play a game of chance of skill for consideration on a mobile device, I just don’t understand the logic of that.”

Fantasy Sports Betting Could Pave The Way

Despite Loveman’s frustrations, the Massachusetts Institute of Technology (MIT) educated casino executive with a Ph.D. in economics said he believes the thriving daily fantasy sports (DFS) market would eventually be legalized, thus paving the way towards a federal law also permitting online poker, on account of their similarities. Currently, the DFS industry has been booming stateside, with national sports leagues lining up behind the market’s biggest operators DraftKings and FanDuel, and according to Loveman,

“And once the NFL moves to the point where they in fact favor this, I think you will see a federal action that legalizes sports betting, somehow defined at the federal level and virtually every state will participate. Once that Rubicon has been crossed, I think poker will very naturally fall in because it has an awful lot of similarities to fantasy sports.”

Caesars Bankruptcy Battle

In spite of stepping down as Caesars Entertainment Corporation CEO, Gary Loveman still retains a position as chairman of the board in order to help advise his successor, Mark Frissora. The new CEO has his work cut out, too, as prior to Loveman resigning, Caesars divided the company into two separate units, namely Caesars Entertainment Corporation (CEC) and Caesars Entertainment Operating Company (CEOC). The latter was subsequently saddled with Caesars huge $18.4 billion debt load, and despite it filing for bankruptcy, bondholders have been appealing that decision, and recently a Chicago bankruptcy judge ruled in their favor, thus paving the way for numerous potential lawsuits.