One of the arguments legalizing online gambling is to regulate the business and weed out questionable operators.
But the so-called legit firms that are forming don’t look much better than the offshore operators. Indeed, several big name Las Vegas casino operators are getting in bed with sleazy online gambling firms with dubious pasts, according to a report by Reuters.
MGM Resorts International has teamed up with Bwin.Party Digital Entertainment Plc, a London-listed, Gibraltar-based firm. In 2009, an earlier incarnation Bwin.Party Digital paid $105 million and admitted to federal prosecutors that it ran an illegal gambling operation and engaged in bank and wire fraud.
Caesars Entertainment Corp is partnering with an Israeli company that in 2007 acknowledged settlement talks with the U.S. Justice Department over alleged breaches of anti-gambling laws. A group of Native American tribes in California has signed up to use software from another Israeli company, run by a man who served prison time for stock manipulation and bribery.
Reuters reports that video game maker Zynga has been in talks with Bwin.Party and others that have had brushes with the law. Meanwhile, PokerStars is considering buying its chief offshore rival, Full Tilt, and making a run at the U.S. market even though founders of both were indicted by the Justice Department last year on charges of illegal gambling, bank fraud and money laundering, according to people familiar with the situation.
The moves echo a modernized real-life business strategy that was used in The Godfather. Recall the classic exchange between Michael Corleone and Moe Greene.
Michael: My credit good enough to buy you out?
Moe Greene: Buy me out?
Michael: The hotel, the casino. The Corleone Family wants to buy you out.
Moe Greene: The Corleone Family wants to buy me out? No, I buy you out, you don’t buy me out.
Michael: Your casino loses money, maybe we can do better.
Moe Greene: You think I’m skimmin off the top, Mike?
Michael: [Michael shakes his head] You’re unlucky.
Moe Greene: You goddamn guineas you really make me laugh. I do you a favor and take Freddie in when you’re having a bad time, and now you’re gonna try and push me out!
Michael: You took Freddie in because the Corleone Family bankrolled your casino, and the Molinari Family on the Coast guaranteed his safety. Now we’re talking business, let’s talk business.
Moe Greene: Yeah, let’s talk business, Mike. First of all, you’re all done. The Corleone Family don’t even have that kind of muscle anymore. The Godfather’s sick, right? You’re getting chased out of New York by Barzini and the other Families. What do you think is going on here? You think you can come to my hotel and take over? I talked to Barzini – I can make a deal with him, and still keep my hotel!
Michael: Is that why you slapped my brother around in public?
Fredo: Aw, now that, that was nothin’, Mike. Moe didn’t mean nothin’ by that. Yeah, sure he flies off the handle every once in a while, but me and him, we’re good friends, right Moe?
Moe Greene: I got a business to run. I gotta kick asses sometimes to make it run right. We had a little argument, Freddy and me, so I had to straighten him out.
Michael: You straightened my brother out?
Moe Greene: He was banging cocktail waitresses two at a time! Players couldn’t get a drink at the table! What’s the matter with you?
Michael: I leave for New York tomorrow, think about a price.
Moe Greene: Sonofabitch! Do you know who I am? I’m Moe Greene! I made my bones when you were going out with cheerleaders!
Fredo: Wait a minute, Moe, Moe, I got an idea. Tom, you’re the Consiglieri and you can talk to the Don, you can explain…
Tom Hagen: Now hold it right there. The Don is semi-retired and Mike is in charge of the Family business now. If you have anything to say, say it to Michael.
Fredo: [Moe Greene leaves] Mike! You do not come to Las Vegas and talk to a man like Moe Greene like that!
Michael: Fredo, you’re my older brother, and I love you. But don’t ever take sides with anyone against the Family again. Ever.
Michael made Greene an offer he couldn’t refuse. In the end, it didn’t turn out too well for Moe who got a bullet in the eye.