Gambling revenge play goes sideways
Gambling revenge play goes sideways
Dunn's opaque donors; Inslee met with Globo Gym, or was it Average Joe's?
We love a tale of political vendetta here at The Observer. Our piece on the calculated political hit the Realtors carried out over an obscure issue of real estate taxation remains one of our best-received offerings. Today we offer a story of failed revenge: a big gambling company taking an aggressive swing at payback after a costly loss in Olympia, only to come away empty, and some $200,000 poorer.
It’s a tale about influence, procedural legislative minutia, public-relations bluster, and how not to win in the small working-class communities of Southwest Washington.
It starts more than a year ago, as Washington lawmakers were considering the newly pressing problem of sports betting. A U.S. Supreme Court ruling tossing out the ban on most sports wagering had brought new pressure to ease state laws around the country, including in Washington.*
Enter Maverick Gaming, a Nevada-based gambling company, which had been aggressively buying up non-tribal card rooms around the state. It currently owns 19 of the 44 such establishments. Maverick, headed by Hoquiam native Eric Persson, was lobbying hard for a piece of that sports betting action, which figures to be a multi-billion-dollar business. In late 2019, the company’s political action committee, Washingtonians Win, made $144,000 in political contributions, including $25,000 apiece to the political committees of the Legislature’s four caucuses, according to filings with the Public Disclosure Commission. That’s a traditional sign of seriousness for an Olympia player. Maverick also paid four different lobbyists a total of $30,000 a month.
But Maverick quickly ran into the entrenched political muscle of the Native American tribes that operate 29 casinos around Washington. Where the card rooms are typically smaller operations that draw players mostly from nearby communities, many of the Native American casinos are massive destination resorts such as the new Emerald Queen Casino in Tacoma, or the Ilani Casino Resort in Ridgefield. They also are allowed to offer a broader variety of games of chance.**
This arrangement gives the tribal operations a near-monopoly on legal gambling in Washington, a lucrative advantage the tribes aggressively defend.*** So it was no big surprise when lawmakers ultimately approved House Bill 2638, which limits sports betting to tribal operations. Five tribes are currently negotiating compacts with the Washington State Gambling Commission to open sports books. Other tribes will likely seek similar compacts in the future.
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Here’s where we get to the procedural legislative minutia. Maverick has the money to mount a referendum campaign, which would have forced a vote of the people in November on whether to overturn that bill. Gambling on sports, both via straight-up illegal bookies and the amateur gray markets of fantasy football and NCAA basketball tournament pools, is enormously popular, and voters might well reject restricting it to just 29 sites. Other non-tribal parties in the business, notably Draft Kings, want bettors to be able to put their money down via their phones anywhere.****
So lawmakers turned to a procedural ploy — the emergency clause. Normally, a bill signed by the governor becomes law only after a cooling-off period that allows for a signature drive to force a referendum vote on a controversial new law. But lawmakers can declare an emergency to avoid this problem.
Now we come to the other main player in this drama — state Rep. Jim Walsh, R-Aberdeen. Walsh, a brash conservative populist, sponsored the amendment to include the emergency clause. The nominal emergency was a short-term loan to the Washington State Gambling Commission to build out an enforcement division to guard against rigged sporting events, but even Walsh concedes it was also aimed at sidelining opposition from non-tribal gambling interests.
Before the bill — with emergency clause attached — even passed, Maverick declared vendetta, vowing to spend more than $20 million in court and at the ballot box to overturn the new law. Then in early March, Maverick specifically set out to oust Walsh from his House seat in the 19th District, which stretches across a swath of mostly rural Southwest Washington from Longview to the Pacific Ocean.
Walsh maintains that he was largely unaware of Maverick until the company came gunning for him. He says his support for the sports gambling bill represented a middle ground for two camps within his constituents: folks who enthusiastically want legalized sports betting, and people who don’t want it at all. The Quinault Indian Nation’s casino is in Walsh’s district, which also contains no non-tribal card rooms.
Now the emergency clause didn’t completely block Maverick from forcing a vote, but it did make it a significantly more expensive and difficult proposition. Maverick would have needed to get an initiative on the ballot to overturn the new law. That takes twice as many signatures and a campaign to persuade people to vote “yes” for the initiative as opposed to “no” on the referendum. In general, it’s easier to get people to vote “no.”
So Persson was understandably irked by Walsh’s tactic. The two met at an event hosted by the House Republican Caucus in February.
Here’s Walsh’s recollection:
“He starts in with all this tough stuff about how I’m from Hoquiam and you’ll never get another vote in Hoquiam again,” Walsh told The Observer recently with great amusement, noting that Hoquiam, although physically adjacent to Aberdeen, is actually in the 24th District, not the 19th.
“So this guy’s going to destroy me, whatever,” Walsh said. “I’ve had a lot of money thrown against me before, so I wasn’t freaked out about it.”
Maverick didn’t make Persson available for an interview, but called Walsh’s description of the meeting inaccurate.
“Mr. Persson shared his disappointment with Representative Walsh that despite growing up in the same area and making a significant investment in Washington’s economy — supporting a workforce of more than 2,200 family wage jobs — Representative Walsh failed to reach out and discuss how his legislation would impact those who live and work in our state,” the company said in an emailed statement.
Soon thereafter, Maverick created a political action committee called Washingtonians Win in the 19th, an offshoot of Washingtonians Win, and dumped $150,000 into it.
Here’s where things get a little weird. While Maverick retains plugged-in lobbyists and consultants in Washington, they didn’t wind up with much role in the campaign, the PAC’s filings with the PDC indicate. Most of the money went to a Las Vegas marketing firm, which spent it mostly on billboards. Now billboards may be great for getting people into casinos, but they’re kind of out of style for politics. Most campaigns for the Legislature get fought out via direct mail and highly targeted digital advertising. In fact, it was the billboards that first piqued The Observer’s interest in this story when we spotted them in the PDC’s data this summer.
“The first round of billboards are completely confusing. Everybody thinks they’re my billboards,” Walsh recalled. “People thought I bought a billboard with a picture of me laughing.”
Here’s what the billboards looked like:
As it turned out, the money might have been better spent boosting Maverick’s choice as Walsh’s opponent. In a surprise result, union official Clint Bryson finished third in the primary behind Marianna Everson, a nurse who ran to his left.
That left Walsh sitting on an incumbent’s war chest of $187,000, with a hyper-progressive opponent in an increasingly conservative district.
Despite more billboards from Maverick, Walsh won by nearly 14,000 votes, or 20 percentage points. In both 2018 and 2016, he had squeaked through by fewer than 600 votes. Walsh likened the billboards to an own-goal in soccer, the worst kind of self-inflicted wound.
“Would I have done better if none of the billboards had ever been up? Maybe. They put my name up in big giant letters.”
Now we should be clear that Maverick wouldn’t share their strategy with us. It’s possible that they were blindsided by the primary result and decided Everson was a lost cause. Persson may have decided to save money for a bigger fight rather than double down on beating Walsh. Maverick never did spend $20 million to overturn the Legislature on sports gambling — at least not this year. The pandemic largely cancelled ballot measure campaigns, and has slowed development of the new tribal sports books.
With all that sports gambling money at stake, you have to figure they’re like a boxer after a bad round — shaking it off, getting the cuts taped up, but not down for the count. Expect them to come out swinging again next year.
*Nearly all forms of sports betting remain strictly illegal in Washington. Your $50 fantasy football league, or that $20 March Madness pool, totally not OK, legally speaking.
**Non-tribal card rooms, by state law, can offer only poker and variations on blackjack. Tribal casinos, which operate under the federal Indian Gaming Regulatory Act, can offer casino games such a craps and roulette, and more importantly, slot machines.
***Along with their significant political clout, the tribes bring a moral argument to this fight. Their casinos are broadly considered a key source of money to sustain tribal self-sufficiency.
****Imagine you’re home on the couch, watching the Seahawks prepare to go for it on fourth-and-short, deep in enemy territory against the allegedly hapless Giants. Your phone offers you a proposition bet on whether they get the first down. You figure: “The Giants suck. Chris Carson’s a great running back, Russell Wilson is one of the best running quarterbacks in a generation. Sure, I’ll take that bet.” Now you understand why folks want to be in the sports gambling business.
Reagan Dunn’s interestingly opaque donors
It’s not a big surprise that King County Councilman Reagan Dunn raked in about $5,000 in campaign cash in a single day earlier this month. Politics is kind of a family business for Dunn, son of the late Republican U.S. Rep. Jennifer Dunn. He’s raised more than $2.5 million over the years, according to the PDC’s data.*
What did jump out at us was that $4,500 of the money came from three opaquely named limited liability corporations, all of which share the same Kirkland street address. Dunn got $1,000 for the primary and $500 for the general election from 1404-WLD Issaquah Townhomes LLC, 1702-WLD ER8 P23 LLC, and 1303-WLD Duvall Village LLC.
A little digging in the Secretary of State’s business database found that all three of those companies are controlled by Westcott Holdings, the parent company of Westcott Homes. It’s common for homebuilders to create separate companies for each development.
The per-donor limit for King County Council races is $2,000 per cycle.
*Most of that money, $1.8 million, was raised for Dunn’s 2012 bid for attorney general, which he lost to Bob Ferguson by more than 200,000 votes.
Inslee meets with Planet Fitness, totally tees up “Dodgeball” reference
Attentive readers know The Observer makes a habit of requesting the Gov. Jay Inslee’s calendar under the Public Records Act. Sometimes it yields a story, like the governor’s post-election meeting with those political high rollers at the Washington Education Association. Sometimes there’s a tidbit that fleshes out a narrative like our piece earlier this month on competing climate taxation proposals.
And sometimes it just sets up a fun movie reference. On Dec. 8, the governor met with Chris Rondeau, CEO of Planet Fitness, one of the country’s largest gym chains, for exactly the reason you’d expect.
“The CEO and the Governor had a discussion about when and how to reopen indoor fitness and the issues that presents in a situation with rising infections,” Inslee spokesman Mike Faulk wrote in response to our query about the meeting.
Our immediate response was: “The governor met with Globo Gym?” For those of you fortunate enough to have not yet seen the 2004 feel-good classic “Dodgeball,” Globo Gym is the evil corporate chain that attempts to take over lovable Average Joe’s Gymnasium.
The takeover attempt sets in motion a ridiculous plot that ends in the two gyms settling matters on the hardwood in an epic dodgeball match, but only after the Average Joe’s squad is hardened by unorthodox training methods.
But of course, it couldn’t be that simple. Even though “Dodgeball” did cop some of its purple color scheme for Globo Gym, Planet Fitness, like Average Joe’s, is famously inclusive. In fact, many serious gym rats disdain it as insufficiently hard-core. Also, turns out Planet Fitness is a franchiser, so individual gyms are actually mostly locally owned small businesses. There are about 40 scattered around Washington.
In any case, whatever Rondeau said to Inslee didn’t work. Inslee shut down indoor gyms on Nov. 16, and they’re still closed. Your correspondent feels for all of you grimly swinging a kettlebell in the living room, and for all of your loved ones who worry you’re about to put it through the window.
But none of us are as fit as Milo
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