After 18 years as gaming's face in D.C., Fahrenkopf steps aside
8 July 2013
By Steve Tetreault
WASHINGTON, D.C. -- The wall of framed photos with political heavyweights from Ronald Reagan and Margaret Thatcher to Barack Obama — reputedly one of the more impressive collections in town accumulated over 30 years — has been taken down.
Two dozen boxes of papers and memorabilia are stacked on tables, on the floor, and atop filing cabinets, awaiting delivery to a warehouse in McLean, Va., where they will join another 35 boxes being transferred from storage in Maryland.
Among the few items not wrapped and packed in Frank Fahrenkopf’s corner office, which is located a block off Pennsylvania Avenue, are the custom desk from London he had crafted 24 years ago, an American flag standing in the corner and a knickknack of herding elephants signifying the job he once held as chairman of the Republican National Committee.
Fahrenkopf, who turns 74 next month, is downshifting after nearly two decades as the face of casino gambling in Washington and one of the most prominent Nevadans in the nation’s capital. The president and CEO of the American Gaming Association (AGA) until he stepped aside on July 1 is plotting what comes next.
Over the years, he has alternately put out fires and served as a missionary for the commercial casino industry that once was concentrated in Nevada but now is an economic driver in almost half the states.
“It was a perfect storm in a way that when the industry needed to have someone, I happened to be here,” Fahrenkopf said in a recent interview.
But after staying on the job for an extra year in the for-now-dashed hope of helping to guide the industry into federally recognized online poker, he was completing his tenure.
“It just reached a point where 18 years is a long time. It’s always good to have fresh people come in,” Fahrenkopf said of the job he took when it was created in 1995 with the intention of staying just a year.
STARTED CAREER AS ATTORNEY
Fahrenkopf, who was born in Brooklyn, N.Y., was a gaming attorney in Reno in the 1960s and 1970s, following his graduation from the University of Nevada, Reno, and the Boalt Hall School of Law at the University of California, Berkeley. He also did work in Washington for the industry after he completed a six-year tenure as Republican Party chairman in 1989.
The year Fahrenkopf began at the Gaming Association, commercial casinos and racetrack casinos were operating in 13 states and took in gross gaming revenue of $16.2 billion. By 2012, there were casinos in 23 states and the industry had revenue of $37.3 billion, although in Nevada it has not fully recovered from the recession that hit in 2008.
Fahrenkopf “has been a part of an era of massive expansion of gaming and has played a major role in the defense of the industry and speaking on behalf of the industry,” said Jon Porter, a former House member from Nevada who is a Washington lobbyist with gaming clients.
“In the last 17 to 18 years, gaming has had to reinvent itself so many times as to whether they are going to do conventions or not, whether they are going to do theme parks or not, whether they were going to be engaged with tribal gaming,” Porter said. “Frank has been engaged on a number of fronts.”
“It’s actually the end of an era not only for him but for the industry at a crossroads,” with the next steps to be taken online, Porter said.
The landscape decidedly was different in 1995, when gambling was more firmly ensconced with tobacco and alcohol as “sin” industries in the public mind. A week after Fahrenkopf began at the Gaming Association, the movie “Casino” premiered as a portrait of 1970s mob-influenced Las Vegas where justice was meted out with baseball bats and vice grips.
A year earlier, Nevada Gov. Bob Miller had to organize pushback against a Clinton administration trial balloon for a 4 percent federal tax on gaming receipts to pay for health care reform.
The effort was successful but at the same time a storm was gathering on Capitol Hill as social conservatives were pushing legislation for a national commission to study commercial gambling. Industry leaders took it as a not-so-veiled threat that led them to create a lobbying office and install Fahrenkopf to lead it.
“That was right out of the box,” Fahrenkopf said. “Why I ever said I would stay for only a year, when that thing took two and a half years. It took almost all our time. That was something that could have been a real disaster for the industry.”
With Nevada’s senators working the Clinton White House and Fahrenkopf working then-House Speaker Newt Gingrich, the industry was able to get three “friendly” seats on the nine-member commission — Nevada Gaming Control Board Chairman Bill Bible, MGM Grand Inc. Chairman Terry Lanni and John Wilhelm, president of the Hotel Employees and Restaurant Employees International Union.
After two years of hearings, the 1999 report of the National Gambling Impact Study Commission was viewed as favorable to the gaming industry, particularly destination resorts such as Las Vegas. It concurred with the industry’s position that regulation should remain with the states and not with the federal government.
Fahrenkopf credited the outcome in part to the industry’s prescience in addressing its biggest perceived problem — gambling addiction.
During his first meeting with the Gaming Association board , he showed the famous photo of tobacco company chairmen testifying before Congress, taking the oath with right hands raised and then swearing to lawmakers that cigarettes were not harmful to health. Of course, that was a lie.
“We don’t want to make the same mistake,” Fahrenkopf told the board.
In what he calls his proudest achievement, Fahrenkopf subsequently struck a relationship with the highly respected Dr. Howard Shaffer, an expert on addiction at Harvard Medical School. That led to the 1996 creation and industry funding of the National Center for Responsible Gaming, which conducts peer-reviewed research on pathological gambling and treatments.
“Back then the anti-gaming movement was saying that responsible gaming was the Achilles heel of the gaming industry, and I think through NCRG, that heel is coated with many layers of lead,” Fahrenkopf said, although he added “it is still a problem and we haven’t solved the problem.”
SAW INDUSTRY GAIN LEGITIMACY
The American Gaming Association each year publishes a “State of the States” report. It is a bible of sorts, containing detailed breakdowns of how casinos are performing in each of the jurisdictions. It also contains results of annual surveys conducted by pollster Peter Hart of how Americans perceive casino gambling.
Fahrenkopf cites the latest numbers — 85 percent of people believe casino gaming is acceptable for themselves or others — as evidence that gaming is increasingly being seen as “a normal industry in this country.”
“We employ a lot of people (332,000 last year) and when we go into a community we employ a lot of people who are the hardest to employ,” he said. “We train them and we provide better than average salary and benefits. We are not a smokestack industry, we are not polluting the environment, and because it is a privilege to have a gaming license, you can tax us higher than you can tax an ordinary business.”
What has happened as well has been the corporatization of gambling, and its acceptance in the financial community.
“What really helped credibility is having people like Terry Lanni (who died in 2011), Jim Murren (chairman and CEO of MGM Resorts), Gary Loveman ( CEO and president of Caesars Entertainment), people who are respected on Wall Street and who we could bring to Wall Street, people who are articulate and smart and who can testify in Congress,” Fahrenkopf said, adding to the list Steve Wynn, chairman and CEO of Wynn Resorts.
Coupled with lotteries and casinos run by Indian tribes (who are not members of the Gaming Association), “The acceptability of gaming has changed dramatically in 18 years,” Fahrenkopf said. “You are never going to get over the hump totally, but we’ve made a lot of progress.”
‘JUST CHANGING JOBS’
Fahrenkopf had a life before becoming a gaming lobbyist. He was the second-longest-serving chairman of the Republican National Committee, holding the post from 1983 to 1989 while Reagan was president.
He was a founder of the National Endowment for Democracy, a nonprofit organization that supplies grants to nongovernmental groups working to build democratic institutions overseas.
Fahrenkopf, who lives in the Virginia suburbs with his wife, Mary, said he is not retiring, “just changing jobs,” although he might not lay out plans until September.
“I may have a little more time for chipping and putting,” he said.
He is thinking of stepping up his public speaking, except now he’ll charge for more of his speeches. He might teach. For at least the next six months, he’ll be available as a consultant to new Gaming Association President and CEO Geoff Freeman.
Fahrenkopf has been approached by the No Labels organization, political professionals who advocate bipartisanship in Congress. Although he used to cheer gerrymandering of congressional districts when it served the purpose of Republicans, he says he is deeply troubled by the practice, and others that have contributed to a breakdown in Congress.
“I’ve thought about it a lot and done some talking about it in the last few months, and I continue to spend some time thinking about it, hopefully to come up with something,” he said.
Fahrenkopf probably is known to most people as co-chairman, along with Democrat Mike McCurry, of the Commission on Presidential Debates, which organizes the election-year events. Fahrenkopf said he plans to continue putting together the debates, “at least through 2106.”
“That’s my real contribution to my country,” he said.
Fahrenkopf said he might associate himself with a Washington law or lobbying firm, except for two things.
“I’m not going back to practicing law, I’ve done that enough,” he said. And, “I’m not going to be walking the (Capitol) Hill every day.”