Integrity Matters

In this issue, Buck Wargo does a great job of covering the integrity issue in gaming. This is such an important story because if we don’t have integrity, we have nothing.

When gambling in the U.S. first ventured out from Nevada, it was proposed for Atlantic City, New Jersey. And to say integrity didn’t play an important role in its legalization in the Garden State is to undervalue its importance.

During the legalization campaign, gambling boosters had to fight the impression that organized crime was involved somehow. And to make sure it didn’t get involved, they wrote myriad rules and regulations that everyone involved in gaming had to adhere to. Applications to work in the casinos were at least an inch thick for lowly line employees and reams of paper for a “key” license, which was required for management positions.

Vendors to the industry had to submit proof of ownership without a hint of impropriety. That scrutiny essentially ensured that people working in the New Jersey casino business at that time had the utmost integrity. When then-Governor Brendan Byrne cut the ribbon in 1978 to open Atlantic City’s first casino, Resorts International, he told organized crime, “Keep your filthy hands off Atlantic City.”

But there were some glitches. I recently had the opportunity to finally see the movie Owning Mahowny, which characterized the scam that Brian Malony, a bank clerk in Toronto—played admirably by the legendary actor Philip Seymour Hoffman—pulled on Caesars Atlantic City while I was employed there.

Malony (Mahowny) was able to wire money to the cage at Caesars Palace in Las Vegas, which was then transferred to the Atlantic City property, because New Jersey integrity laws didn’t allow a direct transfer. Malony was a compulsive gambler, and gambled away millions of dollars at Caesars and elsewhere.

As a baccarat dealer, I had never encountered a player who dealt the cards so fast with tens of thousands of dollars riding on each hand—risking racks of purple $500 chips. As soon as one hand was over, the cards were out for the next hand. (In those days, baccarat was played at a big 14-seat table, and the players dealt the cards, not the dealers.)

So there were definitely holes in the integrity laws. Caesars AC was closed for two days as punishment for violating those laws, but that was really a slap on the wrist.

Lots of other jurisdictions copied the integrity of the New Jersey regulatory system, so that today’s land-based gaming properties are fairly trusted and respected operations with a high level of integrity.

Today, with the expansion of online sports betting and iGaming, the integrity of the industry has again come into question. There have been some horror stories about how online sportsbooks (OSBs) lure players in and the lengths they go to keep them. All the major OSBs have appointed responsible gaming execs, but how much power do they have over how the OSBs conduct their marketing or how they address compulsive players?

As you can see from the land-based experience, sometimes integrity can be hard to pin down. For OSBs, the hurdle has become advertising. Despite “best practices” guidelines set by the American Gaming Association, lots of OSBs have doubled down on ads that are often annoying, sometimes unethical and always expensive.

And not just expensive in terms of dollars but expensive in terms of what it might cost the sports betting community. Many European countries have outright banned sports betting and iGaming ads. In North America, Ontario has already moved to limit advertising and many U.S. states are examining how to do the same.

Integrity is not something you can apply to offshore, illegal OSBs and iGaming websites. Those sites are usually predatory, unregulated and devious, putting customers at risk financially and physiologically. The solution is obviously a safe and viable legal market, but when you have OSBs that limit the participation of skilled players, you are encouraging the illegal market not only to survive but expand and thrive. Not every player understands the nuances of a legal versus illegal market.

So you see, integrity is the key to a successful and respected gaming market. OSBs and iGaming operators still have a long way to go, but if they pay attention to their land-based cousins, that road will be shorter.