LAS VEGAS SANDS CORP.

Testimony of Andy Abboud, Senior Vice President of Government Relations and Community Development Las Vegas Sands Corp. (L VSC)

For the Pennsylvania State House Gaming Oversight Committee Regarding Internet Gambling and HB 649

Chairman Payne, Democrat Chairman Kotik and members of the House Gaming Oversight Committee, thank you for allowing me the opportunity to present testimony on behalf of the Las Vegas Sands Corporation (L VSC). We are proud of our operations in Bethlehem, and appreciate the strong working relationship we have with the Commonwealth. I also appreciate your giving me this opportunity to express our strong opposition to internet gambling.

Allow me to clarify for the record why we are here today.

On Friday, December 23rd, 2011, then-Assistant United States Attorney General for Legal Counsel, Virginia Seitz, issued a 13-page legal opinion reinterpreting the Federal Wire Act of 1961. She opined that the Wire Act covers only bets on sporting events -despite the fact the Justice Department's Criminal Division had strongly and consistently interpreted the Wire Act as prohibiting all forms of online gambling.

No laws were changed by Congress. There was no Federal court decision. There was no regulatory process to change rules, or opportunity for public comment. There was no determination that the Internet had become safe for gambling, and no consideration of the potential for criminal activity.

There was just an opinion letter -- a letter which as Attorney General Nominee Loretta Lynch said during her nomination process, does not have the force of law and can be changed at any time.

This is the legal basis for those seeking to bring internet gambling to Pennsylvania.

We are opposed to internet gambling and HB 649, because of the negative effects internet gambling would have on employment and investment in Pennsylvania, and on its families and children and because of the threat it poses to the public interest.

Jobs and Investment In 2006, the Sands was awarded, through a highly competitive process with numerous public meetings, a Category 2 License to operate a casino in Bethlehem. We promised in our application to build a destination location that would revitalize one of the largest brownfields sites in the country and invest close to a Billion dollars. We started construction at the height of the great recession, when many other construction projects across the country were shuttered.

We are now starting our sixth year of operations in Bethlehem. We have invested almost $900 million to build and develop the largest casino in the Commonwealth, an adjoining mall, hotel and events center. Thousands of skilled craftsmen were put to work building the casino and we now employ over 2,600 team members. The Sands Casino Resort has been catalyst for $100 million of new investment on the adjourning site. Our investment has had profound effect on Bethlehem.

None of this investment would have occurred if Pennsylvania had internet gambling. None of these good jobs would have been created. None of the benefits to the regional economy would have occurred. Why? Because internet gambling is designed to replace people with computer servers -- because internet gambling requires no community investment, no tradesmen, no dealers, and no maintenance worker or servers.

The Pennsylvania Legislative Budget and Finance Committee reported last year that "PA casinos have made $3.l billion in initial capital investments and annually produce about $2.9 billion in total output. PA casinos directly employ about 16,650 people. Casino operations and induced spending from casino employees support about 25,500 jobs and produce about $3.0 billion annually in total economic output. Ongoing renovations and upkeep generate an additional $81 million annually in total output, supporting another 600 jobs. "

Pennsylvania's bold move to permit limited legalized casino gaming has been a huge success­creating opportunities for tens of thousands of Pennsylvanians and generating billions of dollars in tax revenue.

This economic record and these results would not have happened if internet gambling was legal in Pennsylvania. Internet gambling will not lead to new economic development opportunities, because internet gambling is a job killer, not a job creator. Internet gambling companies want to get rid of skilled casino workers, replacing them with a few computer servers and IT staff located overseas.

Children and Families It is clear that Internet gambling threatens Pennsylvania jobs, but it also threatens children and families.

A vitally important component of Pennsylvania's law authorizing casino gaming requires that minors be barred from the casino floor. We support and vigorously enforce this regulation, which is intended to keep kids away from slot machines and other casino games - so they won't be enticed into gambling or unduly exposed to an activity rightly restricted to and suitable only for adults.

Now those companies promoting Internet gambling want to tum this restriction on its head­bringing online casinos to the mobile phones, iPads and laptops of every child in this Commonwealth.

Don't be fooled by the technology companies that come before this Committee today or in the future promising internet technology that will be able to prevent kids from getting online to gamble - because it is nearly impossible to prevent minors from gambling online.

As was acknowledged by a pro-Internet gambling witness testifying last month before a Congressional committee, there is no way to prevent a player from logging on and handing their Pad to a minor. Once a minor gets a hold of his or her parent's credit card, or a debit card, there is nothing to stop the child from opening an account on a gambling website and engaging in gambling activities. And if by chance a licensed Internet gambling site turns away a child who has been enticed to bet online by that site's advertisements and promotions, there is nothing to stop that child from jumping onto an illegal offshore site which will be more than happy to take that child's money.

The largest and most successful internet companies have had tremendous difficulty restricting child access to their websites. In 2014, Apple agreed to provide full refunds to customers, paying a minimum of $32.5 Million to settle an FfC complaint that the company billed consumers for millions of dollars of charges incurred by their children, without their parent's consent.

The threat to minors is compounded when you consider how internet gambling companies are marketing their games. Go online now and perform a simple search for internet gambling sites and you will quickly find games with names like: "Hot Shot", "Kitty Glitter", "Santa Spin", "OMG Kittens" and "Fluffy Favorites" accompanied with pictures of lovable santas, furry cats and sleek racing cars.

Online gambling companies do not respect the normal restrictions on marketing to minors that responsible gambling companies abide by every day. It is also clear that these games are aimed directly at children, with the goal of getting kids to play them.

Threats to the Public Interest Internet gambling poses a larger threat to the public interest. As the FBI has told Congress last year; "Online casinos are vulnerable to a wide array of criminal schemes," and "may provide more opportunities for criminals to launder illicit proceeds with increased anonymity."

HB 649 does not contain specific language to bar "bad actors" -- people or businesses who have troubled backgrounds and dubious legal histories -- from being part of Pennsylvania's gambling industry.

Earlier this year, Caesar's announced an internet gambling alliance with Amaya Gaming, the owner of Pokerstars. At the same time, Caesar's also stated that it was dropping its support for 'bad actor" language in any internet gambling legislation - language which Caesar's before its bankruptcy had vigorously supported, and in fact, lobbied for.

It is important to note that Amaya and Pokertstars have had significant problems with law enforcement agencies around the world.

In 2011, 10 Pokerstars executives were accused by the Justice Department of bank fraud, money laundering and illegal gambling. The company paid the Justice Department $731 Million to settle the case, but its founders remain under federal criminal indictment and on the lam.

In 2014, Amaya Gaming of Toronto bought PokerStars for $4.9 Billion, richly rewarding that company's founders for the player lists and intellectual capital illegally obtained by PokerStars. After the purchase, Quebec Security regulators opened an investigation into illegal trading in the company stock.

Earlier this year, the Italian Government charged Amaya Gaming/ Pokerstars with a $318 Million tax evasion and fraud scheme, alleging the company to have routed gambling activity through Malta and the Isle of Man to avoid Italian taxes.

Given the history of organized crime in New Jersey, that state has strong safeguards in its gaming law. As a result, PokerStars has been denied a New Jersey gaming license and has reapplied for a license. They are awaiting word on their second application.

The Las Vegas Sands stand in opposition to internet gambling in Pennsylvania and across the country, because internet gambling is bad for Pennsylvania jobs, Pennsylvania families and brings the wrong element to Pennsylvania gambling.