Will Sheldon Adelson forgive Steve Wynn for going online in New Jersey?

sheldon-adelson-steve-wynn-fight-clubSteve Wynn appears determined to return to Atlantic City in digital form, but will it spoil his bromance with Sheldon Adelson? Wynn has been open to the idea of online poker for years now, but on Jan. 10, the digital arm of casino operator Wynn Resorts applied for a transactional waiver to participate in the New Jersey online gambling market. The application is a joint filing by Wynn and 888 HoldingsAll American Poker Network (AAPN) that would operate using a permit belonging to Caesars Interactive Entertainment (CIE).

Wynn Interactive started its New Jersey paperwork in July by sending the Division of Gaming Enforcement (DGE) a ‘remember me, I used to work here’ letter. Way back in 1980, Steve was the proud papa present at the birth of AC’s Golden Nugget, appearing in ads handing out towels to Frank Sinatra, only to watch his baby die of acute revenue deprivation shortly before this Christmas. Steve hadn’t controlled the place since 1987 but it still had to hurt watching them officially pull the plug earlier this month.

In September, Wynn announced a tie-up with the AAPN. One month after that, Wynn and Caesars declared their intentions to share server space, because Caesars operates four casinos in AC and thus eligible to apply for up to 20 online gambling ‘branded skins.’ This has left Caesars CEO Gary Loveman walking around New Jersey like Don Corleone in the Godfather, all those surplus online gambling permits in his pocket like so many nickels and dimes.

Caesars’ spokesman Seth Palansky told the Press of Atlantic Ctiy he had “no idea” when a Wynn-branded site might launch, but he struck a magnanimous tone in welcoming both a partner and a competitor to the market. “We don’t own our own software, and it gives [Wynn] an ability to open in New Jersey.” Caesars currently utilizes 888’s online poker software to power its WSOP.com operation in both in New Jersey and Nevada but CIE is in the process of retooling the Barriere Digital software to suit its own needs.

Steve’s commitment to taking Wynn’s action online puts him in the same camp as fellow billionaires George Soros, John Paulson and Leon Cooperman, all of whom reportedly took healthy positions in the Caesars’ spinoff that controls its online operations. It also puts Steve on the opposite side of the issue from Las Vegas SandsAdelson, who believes online gambling causes rickets, beri beri and Flaming Youth.

Adelson has likened online gambling to heroin and cocaine and has vowed to spend big to send it back to the hellish depths from which it crawled. This June, Adelson insisted that Steve was “not totally against what I am saying” regarding the evils of online gambling. But whereas Sheldon views online poker as the most addictive online game, Steve equates banning online poker with banning beer during Prohibition.

Despite this schism, Adelson will likely give Wynn a pass. Adelson likes to paint his protestations in terms of morality, but he’s also convinced that online gambling cannibalizes brick-and-mortar revenue, which may be the ultimate sin (and a myth). As such, Adelson will argue that Wynn has no land-based gambling interests in Atlantic City and thus no existing revenue to cannibalize. In fact, Adelson probably hopes Wynn’s online poker site takes market share from Caesars and MGM Resorts, two debt-laden companies Adelson criticized last summer for undercutting room rates in Las Vegas, thereby lowering the rates “me and my friend Steve Wynn can offer.” Bros before schmoes…