Jon Ralston, contributing editor at Politico Magazine, has covered Nevada politics for more than a quarter-century. He has worked for both major Las Vegas newspapers and now has his own site, email newsletter and television program.

Sheldon Adelson, the most successful gambling entrepreneur in history, is terrified.

If web gaming is legalized, the self-made multibillionaire and mega-donor insists, big-name Silicon Valley companies will invest heavily in the business, eventually coming to dominate the market with their superior technology and global reach. States will smell money and levy taxes. And then it will happen: the apocalypse, sayeth the Cassandra of gaming soothsayers, who is putting his fortune where his crystal ball is.


“Somebody like Google or Facebook, they’ve got a billion customers hitting them every day,” marveled Adelson, who chairs Las Vegas Sands, which owns the Venetian and the Palazzo on the Las Vegas Strip, in a lengthy recent interview. “They’ll come in there, they’ll squash the other guys like … you squash the little ant running across the table or the floor and that’s going to be the end of all of it.”

Is this man bluffing?

“I’ve been an entrepreneur for 68 years,” the 80-year-old casino mogul told me as we sat in a conference room at his offices at the Venetian, a cavernous space with one entire wall festooned with magazine covers with his picture. He was surrounded the entire 75 minutes during this rare sitdown by two aides and his wife, Miriam, a success in her own right as a doctor who specializes in addiction. “I’ve never failed yet. And I’m telling you, the one characteristic of a successful entrepreneur is to have courage and belief in your own convictions.”

If there’s one thing Adelson believes in, it is himself. The octogenarian who parlayed a computer trade show into a billion dollars, sold it in 1995 and bought the place where the Rat Pack hung out, then erected the Venetian where the Sands once stood, knows not of equivocation. And if you listen to him talk about the dangers of web gaming, he does not vacillate, he does not doubt, he does not flinch.

Adelson has said he will spend whatever it takes— he is worth an estimated $37 billion and his earnings dwarf those of all other gaming companies—embarking last fall on what a rival calls a “jihad” to stop Internet wagering and threatening to use his ample political muscle as the country’s largest GOP donor to stop what many think is unstoppable. Now, he’s funded an anti-web gaming coalition, tapped former politicians as mouthpieces and vowed to go state by state to end the scourge.

He cannot be ignored. But despite his undeniable successes in the convention business and in the hard-knocks world of casinos, Adelson has mostly failed at the one business he needs to excel in to achieve his goals now: politics. From seeking to control local elected boards and defang unions to bankrolling pro-Israel groups opposed to Middle East peace talks to spending at least $100 million in 2012 to oust President Barack Obama, Adelson has given much and reaped little.

There are, of course, 37 billion reasons why Sheldon Adelson is still a force to be reckoned with. But this is a fight he just might not win.

***

Adelson stayed ahead of his rivals by building gambling outposts overseas, like the Macao casino shown here. | AP Photo

Adelson’s unlikely foe is the American Gaming Association, the industry’s main lobbying shop, most of whose members—save Adelson—favor online gaming. After Adelson launched his Coalition to Stop Internet Gambling last month, the AGA mounted a counteroffensive, building its own coalition and hiring the likes of Obama guru Jim Messina.

Adelson has pushed back—hard. He derides his rival Caesars Entertainment, which is leading the AGA’s online gaming push, as a debt-ridden, dead company trying to reanimate itself via the web and thereby threatening the future of the entire industry. “They’re completely broke,” Adelson said of Caesars, which stands $24 billion in debt. “You know, the old expression, ‘If you’re so smart, why ain’t you rich? If they’re so smart, why aren’t they successful? I’ll tell you the truth: I don’t think they know what they’re doing.”

This is Subtle Sheldon at work, leveling a broadside at the second-largest gaming company in the world and specifically at Caesars CEO Gary Loveman, a wonkish, 53-year-old MIT Ph.D. who once taught at Harvard University. Many who watch the growing war over gambling’s online future see the whole thing as mostly an Adelson vs. Loveman affair—and it is getting nasty.

“Since [Adelson] is an avowed non-computer user, an Internet virgin so far as I can tell, he does not know what he is talking about,” Loveman told me. Loveman lieutenant Jan Jones Blackhurst, a former Las Vegas mayor, seems even more upset with Adelson, accusing him of “pandering to fear rather than using facts.”

“Sheldon is not a stupid man,” she said. “He’s just stupid on this issue.”

The history of Nevada’s casino industry is one featuring titanic egos who often disagree but who generally have united in being Chicken Littles about emerging markets. First it was New Jersey in the late 1970s, then tribal resorts, then other domestic jurisdictions, then the Far East. But in every one of those cases, those who were crying wolf soon became the wolves, salivating over the money to be made in the new places and eagerly extending their tentacles to far-flung entrepôts like Singapore and Macau.

Web gaming is no different. For years, the D.C. trade group, the AGA, was divided and thus paralyzed. Then the recession hit, technology improved and the race for the digital gold was on. Adelson stayed on the sidelines until about a year ago, when he suddenly announced his opposition, deepening a schism within the industry and setting the stage for an intensely personal fight with billions of dollars at stake. Now the AGA board wants to move forward on the web, spurred on by other casino bosses who see a future significantly less dystopian than does Adelson.

“The American Gaming Association is acting at the behest of its members, many of whom support the right to decide for our individual businesses whether or not online is a viable market opportunity,” said Tim Wilmot, President and CEO of Penn National Gaming. And Keith Smith, who heads Boyd Gaming, said, “At the end of the day this debate is about one thing: choice. Not everyone in the industry sees online gaming as a viable strategy for their businesses, but many of us do. Boyd, along with the vast majority of our industry, views online gaming as an opportunity to be relevant to a new generation of customers, one that is already playing online.”

Indeed they are. Last year, despite online gambling’s murky legal status, $6 billion of the estimated $15 billion worldwide market came from the United States. As Loveman put it to me, “This is where people are moving.”

***

None of this fazes Adelson, whose up-from-the-bootstraps, son-of-a-Boston-cabbie story makes him blunter and perhaps more bellicose than his Vegas Strip colleagues. He doesn’t care about not being as eloquent as Steve Wynn, his more polished competitor; he cares about being much, much richer than Steve Wynn.

Adelson stands out amid a sea of pointy-headed CEOs. (Loveman taught at Harvard. Wynn went to Penn. MGM Resorts’ Jim Murren was a Wall Street analyst.) He is a Horatio Alger figure who failed at a variety of ventures until he eventually parlayed the Comdex convention, which he built into one of the largest computer trade shows in the world, into a worldwide gaming empire. When it comes to Macau, which saved his company and made him one of the richest men in the world, Adelson was the industry’s Christopher Columbus.

He is a ruthless businessman but a nonpareil philanthropist, a fervent supporter of Israel who wears his American patriotism on his sleeve, a man proud to be a maverick but eager to show he is connected to politicians and luminaries (he dropped conversations with Al Gore and Bill Gates into our interview), a multibillionaire obviously proud of his net worth but who claims to have an affinity for the less fortunate because of his upbringing. And he can lay claim to being the most successful casino operator in history, a man who had the vision to foretell what all of his high-falutin’ competitors did not.

“He saw that Las Vegas could become the greatest convention city in America,” said his friend and protégé Matt Brooks, who heads the Adelson-influenced Republican Jewish Coalition. “He built an all-suite hotel when nobody thought people cared about rooms. He saw Asia and Macau and Singapore. Every one of those steps, people said he was nuts, and he was crazy. Every single time he has been right. No one has a better record of seeing around corners, avoiding land mines than Sheldon.”

In this case, though, Adelson is the land mine, ready to detonate at any moment and send shrapnel toward his neighbors and now toward the AGA, which just announced a new campaign to fight what Adelson is doing. (His own coalition went up on Feb. 10 with a web ad warning darkly of “disreputable gambling interests” who are “lobbying hard to spread Internet gambling throughout the country … targeting families, kids, the elderly…”)

Geoff Freeman, who took over last year from longtime AGA chief Frank Fahrenkopf, is the driving force behind the online gaming push. “Time and again government efforts to prohibit use of everyday products have failed,” he said recently. “The Internet cannot be forced back into the bottle, nor can market demand.”

When Adelson hears a top staffer at a group he helps fund essentially calling him foolish, he says, without raising his voice, “Well, I’m considering withdrawing from the organization … You must understand, I don’t want our dues going to hurt our society.”

It almost seems as if Freeman is playing a game of chicken with his most influential member, all but challenging him to leave so the industry could present a united front. And now Adelson is striking back, launching a full-scale fusillade at the group, including a Wednesday-morning conference call morning with the media and a list of 39 organizations backing the effort, including, ironically, members of the religious right who hate all forms of gambling.

Loveman, whom Adelson believe wields disproportionate influence inside the AGA, seems genuinely surprised by the ferocity of Adelson’s rhetoric, saying he met with him “a number of times” until about 18 months ago. “He was not enthusiastic about it,” Loveman recalled, referring to online gaming. “But it was not a focus in his life. His focus was on Israel and his charitable endeavors. Then all of a sudden, he decided to have a jihad on the topic.”

So how did Adelson get here? And just what kind of influence does he wield? In Nevada, Adelson once tried to change the complexion of the Clark County Commission, dominated by Democrats and responsible for regulating the Strip, and went 0 for 3. (Back then, one of the Democratic commissioners focused her successful re-election campaign on him, calling him “the billionaire bully.”)

“I’m not a political guy; I’ve been apolitical my entire life,” Adelson insisted, memorably and, some will say, risibly as he is perhaps the country’s largest single Republican donor and a key player in trying to bring the Republican National Convention to Las Vegas in 2016. “And I only became political when I got involved here.” Adelson explained that he had to be political to make it in Vegas, because the Democrats still run everything from the unions to the all-powerful County Commission.

Adelson has kept the unions out of his properties for years, but when he pushed for the Nevada Paycheck Protection Act, which would have restricted how a labor organization’s dues could be spent, the ballot initiative fizzled as even the incoming Republican governor did not support it.

Still, Sheldon Adelson is, if anything, undaunted.

***

“This is not a money issue with me,”Adelson insisted. “This is a moral issue.”

But for the born-again evangelist, it was first about the money; the moral concerns came later.

Adelson says he came to his antipathy for web gaming when he was trying a couple of years ago to expand his empire into Europe. “It is when I started to look at Spain for a EuroVegas, to reproduce about half of the Las Vegas Strip over there,” Adelson recalled. “So I became familiar with what was going on, and I talked to different people in the industry, outside of the industry, different government people, different business people. It appears as though the online gaming bills that were passed triggered a 20 percent reduction in the visitation to the brick-and-mortar casinos.”

Then came the moral qualms—and for a man who makes his living from a business long associated with society’s seamy underbelly, Adelson can sound surprisingly like a Southern Baptist preacher. “When I started to imagine what would happen with legalized Internet gaming, it scared the heck out of me … because of what’s it’s going to do to our society,” he said. “Can you know your customer? No! Can you prevent money laundering? No! Can you prevent underage children?”

Advocates of online gaming counter that the technology, which includes sophisticated geo-location software, allows the sites to better track players and their habits than you could on a crowded gambling floor. “I believe it can be done very safely and provided better than Sheldon can do in his own buildings,” Loveman said.

Adelson, who has two teenage sons, said he is worried about younger people and the less fortunate. “I’m concerned about college students. They are of age, and I’m concerned about poor people who really can’t afford to do it, that we’re putting all these temptations smack on their kitchen table,” he said.

Brooks, the RJC chief, who talks frequently to Adelson, said the moral issue is not “a contrived issue for him. Anyone who casts aspersions otherwise is misguided.”

But many aspersions are being cast up and down the Strip, and elsewhere. Many of Adelson’s colleagues are furious that he is standing in the way of a new gaming frontier. They see Adelson like a guy standing on a beach waving his arms as if he can stop a tidal wave from crashing down on shore.

Others say Adelson is being selfish, pulling up the drawbridge because his castle has all it needs. They say his business will be unaffected because it relies so much on the impervious Macau market. Adelson all but acknowledges this, saying he has “no dog in this fight.” Most of his earnings come from Asian high rollers, many of whom he flies into Las Vegas.

“He just doesn’t care,” said Jan Jones Blackhurst.

Indeed, Adelson, as is his wont, seems utterly unconcerned with what his colleagues think. At several points during our chat, he framed his beliefs not in terms of capitalism or rivalry but patriotism. “I believe as a father and as a veteran, and as a citizen and patriot of this country, I think it is very bad for the country,” he said.

And while this fight has become hopelessly personal because of the outsized personalities and the money at stake, some of it seems to have legitimately affected Adelson. Multiple times during the interview, he invoked his father, a Boston cabbie who was often broke. “My father was … I don’t think he was an addicted gambler,” Adelson began, “but he loved to go to the race track, go almost every day, and he would lose money, and he would come home and he would have friction with my mother, ‘cause my mother had a knitting store to make up for money that my father couldn’t bring in. I come from a very poor family. And I know how much they and their friends dreamt of hitting it big or hitting a big jackpot. So I know how vulnerable they are, and how easily they can get sucked into the concept of, ‘Oh, this is very easy.’”

Adelson brushes off my suggestion that preying on the vulnerable is exactly what his brick-and-mortar casinos do, saying it is different to “not even get dressed, sitting in your kitchen in your robe and playing there” than to come to places like the Venetian. “So, it’s not hypocritical and it’s not contradictory.”

And he bristles at claims that he simply doesn’t get the web. Adelson acknowledged to me that he is “computer-illiterate” but added, “I mean, I was involved with the Internet, I remember when Vice President Al Gore came to me and said, ‘I want to talk to you about the information highway,’ which is what people called the Internet.” He added that when he ran Comdex, then one of the largest computer trade shows in the world, “Bill Gates would call me up and say, ‘Hey Shelly, can I be keynote this year?’”

***

The political dynamics of this are fascinating, even without the overlay of Obama guru Messina, whose most famous client Adelson disdains and unleashed tens of millions of dollars to beat. And the spectacle of a trade association trying to contain its richest and most outspoken member with a campaign from within is unusual, to say the least.

Adelson said he joined the AGA—and this is priceless understatement—“because it is said that I know a few people in Washington. And they wanted my contacts to help out the industry.”

Under Freeman, the AGA has aggressively moved forward on trying to block Adelson’s prohibition efforts. On Feb. 4, the pro-online gaming Coalition for Consumer and Online Protection opened for business, with former Reps. Mike Oxley and Mary Bono and Messina part of the group, backed by the AGA. Messina will be overseeing the grassroots strategy, ironically doing to Adelson what he did to help the president overcome the money the sands chairman and others pent against him in 2012.

Adelson had already purchased his own high-profile former elected official mouthpieces for his coalition—ex-New York Gov. George Pataki, whose general anti-gambling utterances could pose a problem; former Arkansas Sen. Blanche Lincoln and ex-Denver Mayor Wellington Webb.

The initial trajectory is familiar to many political battles. Both sides have polling that shows people agree with them; each thinks the other is misguided, even disingenuous. But only one side has no spending limit.

Adelson’s strategy is to get the Wire Act reinstated to ban Internet gambling across the country. He said he has “plenty of sponsors” for a bill to reinstate the 1961 law, the de facto web gaming ban that was reinterpreted in 2011. “We simply haven’t pulled the trigger yet.” And he has played a canny inside game, feting the House speaker and majority leader in Las Vegas, helping them raise money to keep the body in Republican hands. But will John Boehner and Eric Cantor block web poker?

Perhaps Congress’s default mode of inertia will prove decisive. “[Legalizing web gaming] can’t get through the House of Representatives,” Wynn, who is one of only a few casino moguls to support Adelson’s position, said. “They can’t agree on anything, especially something this esoteric.”

But Adelson isn’t taking chances. He has an interesting sub rosa relationship with Senate Majority Leader Harry Reid, which the latter has cultivated and which Adelson has used. I understand there is mutual respect – Adelson previously has told me he likes Reid – and Reid is unmatched in neutralizing potential campaign enemies. When I asked Adelson if he had talked to Reid about web poker, he replied, “I can’t say.” That is: Yes. (I asked Reid’s office whether they had talked about Internet gaming. What I got: crickets.)

Most of the industry was furious with the majority leader at the end of 2012 when some members thought he didn’t deliver on a web poker bill he had promised. And I am sure he did not endear himself to some when he came out last week against the new AGA-backed coalition’s bid to get expanded gambling on the web.

Adelson has been a supporter of Nevada’s Republican Gov. Brian Sandoval, but he did not seem upset that the governor has been a huge booster for web poker. “I talk to him about other things,” Adelson said. Nevada, with its tiny pool of players, is not on Adelson’s radar screen. He wants a federal ban, and he’s already sent his government affairs chief, Andy Abboud, to testify before a House panel. And he’s willing to jump on one of his 20 planes “when the time is right.”

“I’ve talked to an awful lot of people [in Congress] and I see how people feel about this,” Adelson insisted. “I even volunteered to go and testify before Congress on the whole subject.”

And that will be a scene to be witnessed. Imagine Jim Messina in a position to feed congressmen questions for Sheldon Adelson. Turn on the cameras for that show.