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World Without Fahrenkopf

American Gaming Association weighs replacement for the only president and CEO it ever had

World Without Fahrenkopf

When the gaming industry decided to form a trade association based in Washington, D.C. in 1994, there was little question about who to place in charge. Frank J. Fahrenkopf, Jr. was the unanimous choice for several reasons. He was a well-known gaming lawyer in Nevada, but was also plugged into the American political landscape in unique ways.

As a major particpant in Republican politics in Nevada, at the time the dominant party, Fahrenkopf built major influence for the state with the national Republican Party in the 1970s. He became a member of the Republican National Committee in 1975, joining its executive committee in 1977. In 1983 he became chairman, engineering Ronald Reagan’s landslide re-election victory in 1984 and George Bush’s election in 1988. He was the longest-serving chairman of the Republican Party in the 20th century, resigning in 1989.

The American Gaming Association became a home for Fahrenkopf, who built a powerful organization representing what was in 1994 a relatively unknown industry in Washington. But its founding came just in time, as some congressmen, alarmed by the spread of gaming across America in the 1990s, sought to develop federal laws controlling or even stopping the growth of the industry by organizing the National Gambling Impact Study Commission. The nine-member panel was designed to spend more than a year studying the industry and return with a scathing report that would institute rigid controls and high federal taxes—at least that is what the anti-gaming congressmen hoped.

Fahrenkopf, using his skill as someone who could talk to both parties, was able to secure positions on the commission for three pro-gaming advocates, MGM Grand President and CEO Terry Lanni, Nevada Gaming Control Board Chairman Bill Bible, and the hotel union boss, John Wilhelm. Four other commission members were relatively neutral and only two members could be characterized as anti-gaming—most notably James Dobson, the head of the conservative group Focus on the Family.

After a grueling travel schedule crisscrossing the country from Boston to San Diego, the commission issued a report that, rather than punish the gaming industry, acknowledged its economic benefits and produced studies that accurately measured social problems, particularly problem gambling. Thanks to Fahrenkopf, the industry had dodged a huge bullet.

But it was his foresight to understand that the industry had to get out in front of its perceived problems rather than let the problems come to him. In one of his first acts, he encouraged the industry’s leading companies to set up the National Center for Responsible Gaming, a research organization that studied the little-known subject of pathological gambling. More importantly, he convinced them to blindly fund it, with no chance to influence the outcomes of the research.

“I didn’t want to see casino executives sitting before Congress saying they didn’t know about the problems,” says Fahrenkopf, referencing the congressional hearings that vilified tobacco executives for turning a blind eye to the damages done by their products.

Today, the NCRG is the preeminent organization studying problem gambling, and only the most cynical critic continues to cite the industry’s funding of the research.

In addition, Fahrenkopf founded and has served as the co-chairman (along with co-founder Democrat Paul Kirk) of the Commission on Presidential Debates since 1986.

So, the loss of Fahrenkopf and his considerable political skills will be a blow to the organization. In addition to the politics, the AGA is virtually self-funding by its ownership—along with Reed Exhibitions—of the Global Gaming Expo. Now 12 years old, G2E is the main trade show for the worldwide gaming industry, held each year in Las Vegas. Attracting up to 30,000 people every year, the show offers the newest products, the latest trends and educational opportunities for gaming executives at all levels.

The 73-year-old Fahrenkopf was born in Brooklyn, but moved early in his life to Reno, where he attended the University of Nevada Reno. He earned a law degree from the University of California Berkeley in 1965.

The AGA board of directors has appointed a search committee and retained an executive search firm. Fahrenkopf will step down on June 30, but stay on as a consultant for the remainder of 2013 to help ease the transition.

But a transition to what? Early candidates include former members of Congress Shelley Berkley and Jon Porter. Caesars executive and former Las Vegas Mayor Jan Jones was mentioned. But no one will have the depth of political experience or the skill of Fahrenkopf.

Sources tell Global Gaming Business that a “two-headed monster” scenario is being considered: a high-powered lobbyist would be hired as president to direct the lobbying efforts, while current Senior Vice President Judy Patterson would be retained to run the day-to-day operations of the association, including the G2E activities, NCRG relationship and other initiatives started at the AGA under Fahrenkopf’s term. Patterson has also been an effective executive at the AGA since its inception.

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