AGA: The Future is Now

Departure of Geoff Freeman causes reflection on the direction of the American Gaming Association

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Replacing a legend is never easy, but that’s exactly what Geoff Freeman had to do when he took over as president and CEO of the American Gaming Association five years ago. Frank Fahrenkopf, a former chairman of the Republican Party, was the founding president of the organization and served for 17 years.

Fahrenkopf was well-known in Washington, D.C., and led a defensive strategy as AGA head. He successfully led an effort to de-fang the National Gambling Impact Study Commission in the late 1990s, which was formed to dig up dirt on the industry. Fahrenkopf helped to get several pro-gaming commissioners appointed, so the final report actually told the truth about the industry.

He recognized the dangers of a “tobacco-style” inquisition in Congress, so he directed the formation of the National Center for Responsible Gaming, which pursued research into the then-little-known field of problem gambling in a balanced and independent manner.

But under Fahrenkopf, the AGA was a stagnant, inward-looking organization playing defense. Freeman had other ideas.

 

Expansion Plans

Freeman laid the groundwork for expansion of the AGA immediately upon taking over. His appointment was anointed by MGM President and CEO Jim Murren, who was also the chairman of the AGA at that time, and Freeman put his plan into place with Murren’s blessing.

The AGA was formed and was still controlled by six Las Vegas-centric companies, which included the biggest operators and manufacturers in the business. A seat on the AGA board was coveted; it was a small club. Freeman wanted to expand the membership of both the AGA and the board.

“The suppliers who were members believed that the AGA only wanted their dues money,” says Freeman. “The organization didn’t represent regional casino operations and didn’t represent tribes. We’ve changed that, and we’ve built an organization that I think effectively represents the totality of the industry.

“You can’t say you represent the industry, if you don’t represent the industry. You need to have people around the table.”

To get those people, Freeman was tasked with expanding the association, even though it might diminish the power of the original members and founders. Murren became chairman of the AGA at the same time Freeman was appointed.

“We felt strongly we needed to evolve the AGA into a more inclusive, contemporary and forward-looking organization,” says Murren. “We had an opportunity to take a fresh look at the leadership of the AGA, so we looked for a leader who had enthusiasm, intellect, collaborative skills with energy and experience in other similar industry that had a more contemporary view of government affairs.”

Tim Wilmott, the president and CEO of Penn National Gaming, is now the AGA chairman, and believes expanding the membership made sense.

“As a board member and now as chairman, I was very involved in all the strategic decisions we made at the AGA as members,” he says. “Clearly, we’ve become a much more inclusive organization. We made the decision to include tribal membership as part of the association. Geoff provided the structure and the understanding about how a trade association should work.”

Tribal membership was a little more controversial, since for the first 17 years of the AGA, tribes had been excluded. But because tribal gaming and commercial gaming have common issues and interests, most believe it makes sense.

“I believed that there should be ways for the commercial gaming industry and the Native American industry to work together,” explains Murren. “There will always be areas of competition, as there are very passionately today, but I was the first advocate to bring in Native American tribes. Yes, that’s a bit ironic given my position with MGM, but I felt that was important and so did Geoff.”

Wilmott expects the tribal drive to continue.

“I think we’re a stronger organization having tribal membership from California or Florida or Oklahoma or Connecticut,” he says. “These are significant businesses in our industry, and their input is important to the direction the AGA is going.”

Jana McKeag, a former member of the National Indian Gaming Commission and now the president of Lowry Strategies and a tribal consultant, says there are still differences.

“The tribes have some issues that coincide with those of AGA but not all,” she says. “The AGA has to be careful to make sure those differences are respected.”

McKeag says the National Indian Gaming Association was initially upset about the AGA’s outreach to the large gaming tribes.

“I’ve been impressed by NIGA and how they’ve navigated the fact of some of their larger members also joining the AGA,” she says. “But I have concerns that the large tribes might leave NIGA, and it would then become an organization of the smaller tribes. But this is all to be determined by whoever becomes the new leader at the AGA.”

Jan Jones Blackhurst, executive vice president of public policy for Caesars Entertainment, member of the Gaming Hall of Fame and longtime AGA board member, agreed with the decision to bring tribal members into the organization.

“Bringing the tribes in made sense because we have similar issues and a common focus,” she says. “But remember, how do you build consensus when you have such a broad membership?”

Freeman remembers Gary Loveman, the former chairman of Caesars, giving him a similar warning.

“I remember early on, Gary Loveman saying to me that if we can’t get six people to agree, how are we going to get 36 people to agree? And I think one of the great ironies in association management is that when people feel that they have a seat at the table, when they feel that their voice is heard, when they feel that they’re isn’t somebody else, on the inside or outside, trying to screw them, their ability to find consensus is greater.”

Adding the tribes has been tremendously productive, says Freeman.

“When I speak to the average person on Capitol Hill, they don’t delineate between tribal casinos and commercial casinos,” he says. “It’s all casinos to them. So, the first thing you have to accept is, if you want to keep out $30 billion, you have to swim upstream in trying to get people to understand why your industry is different than that industry. I believe we have more in common than we do that divides us. Don’t get me wrong; we have things that divide commercial gaming and tribal gaming. We have things that divide commercial gaming and commercial gaming. But what we can accomplish when working together, is worth working together.

“We have two members—for the first time ever—of tribal gaming, Seminole Hard Rock and the Chickasaw Nation, on the executive committee of the AGA—not just on the board, but on the executive committee, which has been tremendously productive because of their participation. So, I think the comfort level is only becoming greater, and the opportunities are only becoming greater in terms of what we can accomplish when we’re working together.”

 

Sports Betting Victory

Maybe the hallmark of the Freeman era was the campaign to overturn the Professional and Amateur Sports Protection Act (PASPA). The AGA partnered with many different organizations—law enforcement, leagues, other associations and more—to educate the public about the failure of PASPA and the consequences of leaving it in place.

Wilmott says the goal was to educate the public—and the media—to get public opinion on the AGA’s side.

“We knew the facts were on our side, so we just brought in the right resources to counter these arguments and the outcome reflected those facts,” he says.

Murren says the sports betting campaign went to the core of the AGA’s mission.

“The greatest opponent I’ve ever faced in the gaming industry is the lack of information or misinformation,” he says. “The AGA very clearly, very objectively, very calmly provides fact-based information so we can find out if there is common ground on any issue.”

But the more the arguments were laid out, the more sophisticated was the message.

“We started working on the issue in 2014, and we certainly became smarter over time,” says

Freeman. “We did refine our message, and the one thing that everybody could agree on, and nobody could argue with, is that we have a huge illegal market that’s not doing anybody any good. And now, as leagues go out there and push things that add undue cost to a legal market, we’re able to talk about what effect that has, and how that drives the consumer into the illegal market. So, I think that the ability to talk about an illegal market, the size of the illegal market, was a winning message.”

Caesars’ Blackhurst says it was a good message but questions its effectiveness.

“The AGA had a good argument for sports betting, but they had nothing to do with the decision,” she says. “I’ll give credit to Chris Christie and Ray Lesniak on that, and all the lobbying on the part of the AGA wasn’t going to influence the Supreme Court.”

Dave Rebuck, the director of New Jersey’s Division of Gaming Enforcement and an individual directly involved in the Supreme Court suit, was more circumspect.

“As a lawyer, I know a marketing campaign can’t influence a Supreme Court justice,” he says. “But they did a great job of educating a public who knew nothing about how sports betting was conducted, the economics of the business, nor the depth of the illegal market. So I believe that spreading those facts educated lots of people, and who knows, maybe a Supreme Court justice or two.”

But now that sports betting is permitted in the U.S. and states are considering legalization, what should the AGA role be? Opinions vary.

“We’re not going to be all aligned on sports betting,” says Blackhurst. “They shouldn’t be trying to negotiate something they don’t have a consensus on. We’re happy to have conversations with states about access to data, but we’re not interested in having any kind of legislated ‘partnerships’ with the leagues in U.S. sports betting. We’re just not.”

Murren understands that each state will approach sports betting differently.

“Individual members of the AGA will likely have different opinions on how the AGA should approach the individual states,” he says. “With every state approaching sports betting slightly differently, it’s going to be important for the AGA to provide information and common thoughts, but it’s probably less advisable to take any particular stance one way or another.”

Wilmott says the campaign of education should continue, but with an understanding about the differences between states.

“(AGA vice president) Sara Slane is leading that effort, and she’s been very plugged in with all the states,” he says. “So even with Geoff’s departure, and we’re discussing state by state, we’re not going to miss a beat.”

“Honestly,” says Blackhurst, “most of the members don’t want them in the states. They have state organizations that are more plugged into the issues and the players. They have the best of intentions but they may do more harm than good.”

And when it comes to tribal gaming, where complications like compacts and other state activities are considered, McKeag believes there is no place for the AGA.

“The AGA will have a hard time addressing tribal issues as they pertain to sports betting,” she says. “This is going to be a challenge because legal sports betting will affect each tribe differently.”

 

Perception Drives Policy

One area that began under Fahrenkopf and was greatly expanded under Freeman was a focus on gaming’s impact on the communities where it operates. Freeman’s AGA launched the “Get to Know Gaming” campaign, which researched the economic and social impact of gaming on various states, followed by a highly publicized press conference featuring the AGA and local politicians and regulators. And it worked.

“Policy doesn’t happen by accident,” says Freeman. “It happens because there’s a point of view about our industry. We need to create an informed point of view, and nothing can help us do that more than research. Nothing can help us do that more than telling the story of this industry. Gaming is not a white-hat industry, but we always found a way to tell a good story. And the stories we tell are actually true. And I’m joking when I say that, but the stories we have in this industry are good stories.”

Blackhurst says this should continue to be a priority of the AGA.

“The AGA’s primary goal should be to keep the federal government out of our business and to communicate the multiple benefits that the industry brings to the economy of the state in which you do business,” she says. “Those are two very good things. But getting involved in regulatory conversations or on issues where we’re all not aligned is going in a different direction.”

 

AGA of the Future

Wilmott says the departure of Freeman is a bump in the road, but because the AGA members approved the “Strategic Plan 2020” in 2017—a roadmap to the future—the course is set.

“No one’s happy that Geoff’s leaving at the time he is, but the AGA is in very good shape,” Wilmott says. “Membership is strong, the financial situation of the organization is very healthy. We have a plan in place going forward.”

Murren says the plan is comprehensive and was signed off by all the members.

“The issues we identified were more community engagement, more congressional engagement, tackling issues like diversity, promoting and improving the workforce through training and education, collaboration with other industries, addressing sports interaction with our entire industry—not just betting but the entire spectrum of how we interact with sports—looking at trade and tourism issues, and getting a clear understanding how important gaming is under the umbrella of tourism,” he says.

Murren says it’s a continuation of the diversification of membership and outreach to partner organizations.

“We know the value of our industry,” he explains. “We know the economic, social and political importance of our industry. Many non-members at the time felt the same way but felt they weren’t being invited into the discussion. I knew there would be a high degree of receptivity but I was very happy with deliberative and very focused efforts by Geoff and his team.”

Blackhurst feels that the AGA has lost some influence on Capitol Hill that it had when Fahrenkopf was in charge.

“They should look at building their federal strengths. I don’t think anyone at the AGA today has a particularly strong voice on the Hill,” she says. “I think we need an AGA leader with more visibility on the Hill. We just had someone in place for five years who was charged with building up the organization, and we’ll see if that’s going to work, but in my opinion, we need someone with the respect and stature in political circles.”

Wilmott and Murren are both on the six-member search committee to find a replacement for Freeman.

Murren says he’s encouraged that the gaming industry in general is now able to attract people from outside the industry because of the higher visibility it has and its perception now as a form or entertainment, not just solely gaming.

“At MGM, we’ve attracted interest from people who would have never been interested in the gaming industry previously,” he says. “And now they’re not only interested, but they’re enthusiastic. And I’m sure that will come to play here in the search.”

While the path forward is clear with the strategic plan, Wilmott is open to hearing what a new leader would have to say.

“Anytime you bring someone new in, they’re going to want to put their stamp on an organization,” he says. “And we’re open to considering things that could be additive to that plan. We’ll be open-minded and we’re willing let the new CEO put his or her imprint on the direction.”

Most people understand that the AGA under Fahrenkopf was very different than the organization led by Freeman.

“For me and for many of the members—but not all—there was a feeling that with the AGA, born out of necessity at a time when the federal government was attacking us unfairly, Frank Fahrenkopf and the founders of the AGA were incredibly effective by being very focused on protecting the commercial gaming industry, which was literally under attack from every direction,” he says.

When that pressure was off, the AGA needed to become a more typical trade association.

“That was a philosophical change that not everyone immediately embraced,” but it moved forward with broad consensus.

Murren understands that the board won’t agree on every issue. Even today, there’s not an AGA consensus about online gaming. But Murren believes the AGA can survive and thrive with some differences.

“I would be disappointed if there were not division within the board because that would mean we’re not thinking independently or creatively,” he explains. “We’ve come to multiple conclusions and decisions at the board level, but if we can gain general consensus, that is more powerful than being inert.”

Freeman moves on to new challenges as president and CEO of the Grocery Manufacturers Association, a group that makes the AGA look like a love fest. But he’s excited about the future both for himself and the AGA.

When asked about his legacy at AGA, he demurs.

“I don’t think you really have a legacy after only five years,” he says. “But there are things that stick with me. I’m proud of the unity, I’m proud of the consensus, I’m extraordinarily proud of the team that we’ve built here.”

Roger Gros
Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.

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