Dancing the Silly Dance

It was a nice letter, but with lots of other things to worry about—pushed by lobbyists with longer histories and deeper pockets—it’s unlikely much will come of the missive sent by the Congressional Gaming Caucus to Attorney General Merrick Garland, according to savvy gaming observer Richard Schuetz.

Dancing the Silly Dance

“… don’t you like to write letters? I do because it’s such a swell way to keep from working and yet feel you’ve done something.”Ernest Hemingway

Maybe I have been hanging about the gaming business too long.

The gaming space had a bit of buzz of late over what is being called the “Congressional Letter.” This is a letter sent by Representatives Dina Titus (D-NV) and Guy Reschenthaler (R-PA), co-chairs of the Congressional Gaming Caucus, and signed by an additional 28 representatives. The letter was sent to Attorney General Merrick Garland, who is probably sitting idly by in his office waiting for a project that would give him something to do.

Of course, the politicians worked to make news of the letter through their networks. The American Gaming Association put it out on their wire. The affiliates generally ran with it, several of the leagues joined in, and it had a fair shelf-life on the gaming news cycle.

I guess all of that is good, for the letter suggests offshore sports betting websites can be the source of much evil in the world. That may, of course, beg the question as to why would people with perfectly good access to sportsbooks within their ‘hood bother to seek out a site offshore? Over the years I have found there is a funny thing about markets—and that is they tend to work, and they tend to work for a reason.

Not to rain on anyone’s parade, but if an offshore operator owes you some money, it probably doesn’t warrant you losing any sleep. My guess is they will all stay open and busy for quite a long time.

By way of a buzzkill to all of those folks embracing the importance of this letter, these types of actions are not new. They are just part of a silly dance in Washington and beyond. They are oftentimes a valuable tool before elections to remind certain companies that these politicians are on the job for them and deserve a political contribution or two. The lobbyist folks like to run with such campaigns for it keeps them top of mind with the people who pay their bills and gives the impression they are doing something. And the affiliates wake up every day searching for content, and this type of thing is generally low-hanging fruit. So, these letters do serve a great many beneficial purposes.

A decade ago, during my time in California when I was on the Gambling Commission and was the consultant on iPoker, sports betting, and iGaming matters to both the governor’s office and the senate legislative gaming committee, I began looking into such topics as the offshore delivery of gaming products. In this research, I had the good fortune to discover another industry that had a situation where some Americans preferred offshore sources for a product—and this was the pharmaceutical industry.

Back then it seems many folks preferred to receive their prescription drugs from other countries rather than from their neighborhood drug store. Why? Because the drugs were considerably cheaper when purchased from afar. There is a very simple reason for this, and it is our domestic sellers have fundamentally higher-cost conditions in the operation of their businesses. Without going through a list of technical reasons for these higher-cost conditions, let it be argued that the basic cost condition which makes domestic drugs so expensive is the drug companies send a ton of money to politicians and lobbyists, and this results in both higher costs to consumers and a curious set of rules that chokes the life out of anything resembling a competitive market. Therefore, to keep a boatload of politicians and lobbyists awash in drug company money, the consumer must pay the freight with higher prices… or go offshore.

And this continues. This morning in my spam filter I deleted several emails offering to sell me prescription drugs from Canada. If one has ever visited a town on the Mexican side of the U.S. border, one will note that about every third store is a farmacia. And the dark web is also a part of the supply chain for prescription drugs. So, like with sports betting, one notes there are some very viable markets for prescription drugs in non-local markets.

It is also interesting to note the gaming argument against this type of behavior has been essentially stolen from the drug folks, and that is that all kinds of bad things may happen to the consumer of these offshore products. With drugs, you may drop dead, whereas, with sports betting, you may be dealing with a money launderer (other than your bank, of course) or some such thing. But enough people are willing to consume these drugs that many (with an emphasis on many) billions of U.S. dollars are spent on them. So too it is with sports betting

It is also important for the gaming folks to understand that the drug folks own a great many more politicians than the gaming folks presently do. Moreover, the drug companies have been annoyed about this offshore stuff for a great many more years.

I would guess that the gaming folks can feel comfortable knowing that once Merrick Garland has read through all of the drug letters, he will get to those written about the gaming industry.

In the meantime, enjoy the silly dance.

Articles by Author: Richard Schuetz

Richard Schuetz started dealing blackjack for Bill Harrah 47 years ago, and has traveled the world as a casino executive, educator and regulator. He is sincerely appreciative of the help he received from his friends and colleagues throughout the gaming world in developing this article, understanding that any and all errors are his own.