Lessons learned: Freeman departs AGA after changing focus of the organization

Geoff Freeman’s first year heading the American Gaming Association easily could have been his last.

The Washington D.C.-based trade organization undertook a proactive campaign in favor of the nationwide legalization of Internet gaming during 2013 and early 2014. However, MGM Resorts International Chairman Jim Murren – chairman of AGA’s board at the time – told Freeman to dial down the lobbying and advocacy efforts. The debate, and the heated dialogue, were fracturing the membership.

Freeman realized his error.

There were big-name industry companies on opposite sides of the Internet gaming legalization debate. What Freeman didn’t consider were the opinions of AGA members that were neutral on the issue.

“One of the lessons I learned was the power of the uncommitted middle,” Freeman recalled in a July 18 interview. “That’s a lesson that will stay with me for some time.”

It was a lesson Freeman considered a year later when the AGA began organizing efforts behind New Jersey’s court battle to legalize sports wagering. The major commercial casino operators favored the idea, but he tasked the AGA team with building harmony among the entire membership.

“The involvement of the independent middle was important in developing consensus,” Freeman said.  “One thing I’ve learned about leading an association is to create a situation where opinions from everyone are both heard and respected.”

In May, the U.S. Supreme Court sided with New Jersey’s case and opened the doors for legal sports betting across the country. It also marked a perfect time for Freeman to depart the AGA after five years as CEO.

He announced in June he would become CEO of the Grocery Manufacturers Association, a Washington D.C.-based organization that speaks for the $2.1 trillion food, beverage and consumer product industry.

“The court ruling made the decision a lot easier,” Freeman said. “It would have been more difficult if the Supreme Court has sent the matter back to Congress to decide.”

Freeman is in his last week with the AGA and is moving to an association seeking help.

“They approached me, and we came together rather quickly,” he said. “I wasn’t interested at first, but I was captivated by the challenge. We need to modernize the organization and make it more relevant. The lessons I’ve learned with the AGA are very applicable.”

Changing the direction

Freeman, 43, became just the second person to lead the American Gaming Association when he was hired in 2013. He had been the No. 2 official with the U.S. Travel Association, an organization he worked with for seven years.

Some of the tools he learned with the travel group he brought to the AGA. The biggest – and maybe most controversial – was to change the role of the organization.

“Associations are story tellers,” Freeman said. “We wanted to make sure we told the story of the gaming industry and communicated our message. Perception drives policy. We had to (create and) drive a more favorable perception of the industry.”

The AGA was created in 1995 by casino industry leaders to battle anti-gaming forces that could have halted casino expansion and prompted federal taxation on casino earnings. They initially installed Frank Fahrenkopf Jr. as CEO. A Reno native and attorney, Fahrenkopf was straight from central casting for the role. A lobbyist, he became a consummate Washington D.C. insider through his role as chairman of the Republican National Committee.

Freeman, a native of Midwest, was not a lobbyist nor an insider. He was more circumspect and reserved than his predecessor.

“I give Geoff a lot of credit for his leadership,” said Las Vegas Sands Senior Vice President of Corporate Communications Ron Reese, a member of the AGA board. “Geoff’s experience with trade associations helped change the AGA for the better.”

Freeman decided almost immediately that the AGA wasn’t representing the entire gaming industry and worked to expand the organization’s membership beyond the major Las Vegas-based commercial casino operators. In the past five years, regional gaming companies, racetrack operators, equipment manufacturers, and gaming-associated businesses have joined the organization.

One of the more controversial moves came in 2015 when Florida’s Seminole Indian Tribe – owners of the Hard Rock Casino brand – became the first Native American organization to join the AGA. Today, the AGA has a dozen tribal gaming members.

“That’s reflective of the industry itself,” Reese said. Commercial or tribal casinos are now located in 40 states. “Most Americans have easy access to casino gaming. That wasn’t the case 10 or 15 years ago. It made sense to expand.”

Penn National Gaming CEO Tim Wilmott – the AGA’s current chairman and a member of its executive committee since 2013 – said it was a “collective decision” to increase membership beyond the large casino operators and suppliers.

“Forty to 45 percent of casinos today are tribal,” Wilmott said. “Our organization is stronger and much more inclusive.”

Only two companies – Churchill Downs and Station Casinos – left the AGA during Freeman’s tenure, which is one his biggest disappointments. “I never want to lose any members,” he said.

On the positive side, Freeman said he never sought a dues’ increase. When he began, the AGA budgeted roughly $1.9 million in dues revenue. This year, he said the figure will be “more than three times that total.”

Expanding the board and focus

In the past five years the AGA’s board of directors grew from less than a dozen to its current contingent of 35. Freeman said he never sought a board vote on any issue.

“(Former Caesars Entertainment CEO) Gary Loveman told me that if we (couldn’t) get six people sitting around a table to agree on something, how are we going to get 30,” Freeman said.

Instead, he focused on three areas: bringing the board up to speed on initiatives, updating board members on major issues facing the industry, and fostering an environment where board members could interact and possibly develop relationships for the betterment of gaming.

“We wanted our board members to walk away smarter about various topics in which they might not have had a good understanding,” Freeman said.

Reese credited Freeman with developing an association with a strong industry voice. He also said Freeman learned that developing consensus on any issue was not easy to achieve.

“You work toward an acceptable majority,” Reese said.

Under Freeman’s leadership, the AGA transitioned to serve as an advocate for gaming expansion and to advance a proactive public policy agenda. In his first year, the AGA stepped into Massachusetts to help opponents of a ballot referendum that would have halted the state’s casino projects. A few years ago, the AGA launched the “Get to Know Gaming” effort, which highlights the economic benefits the industry brings into various communities, counties and states, including tax dollars and jobs.

A 2014 study conducted by the research arm for the AGA found commercial and tribal gaming industries had a combined economic impact of nearly $240 billion on local communities.

In 2016, the AGA created a grass-roots campaign to thwart an Internal Revenue Service proposal to lower the slot machine jackpot reporting threshold from $1,200 to $600. The IRS abandoned the plan a year later after receiving more than 14,000 written comments against the changes.

Freeman said the AGA created a relationship with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) to formulate a “best practices” program for the casino industry to comply with anti-money laundering laws.

Wilmott said expanding the role of the AGA was critical to the organization’s success and was a collective decision.

“In the last five years, most of the issues were being addressed at the state level and a very small amount in Washington D.C.,” Wilmott said. “I think it has truly helped our cause by going state to state.”

Jan Jones Blackhurst, Caesars Entertainment’s executive vice president of public policy and corporate responsibility, said Freeman “created an entirely different type of trade organization,” one that she criticizes as “too large.”

Blackhurst said commercial and tribal casinos often have different views, plus the addition of online gaming providers and video lottery terminal operators “limits what the AGA can do.”

“We have a very large and very conflicted membership,” Blackhurst said. “The companies do a much a better job in the individual states. I don’t want (the AGA) running into my state. We need to do a better job on Capitol Hill.”

Next up

Moving forward, the AGA has established a search committee to seek its next CEO and hired an executive consulting firm to assist in the search.

Stacy Papadopoulos, the AGA’s general counsel and senior vice president of industry services, will hold the CEO position on an interim basis until a new chief executive is named. Most insiders don’t believe the position will be filled permanently before the annual Global Gaming Expo in Las Vegas rolls around in early October.

Wilmott said Freeman and his team put into place a strategic plan that provides the organization “with a road map” through 2020.

Freeman said he gave the board a list of 10 bullet points that he believes are the most important aspects of the job. He said the decision – to go with another person with trade association experience or a politician or lobbyist – is up to the board.

“It boils down to what type of association they want to be,” Freeman said.

As for the AGA staff, he said the team of 27 are the group that is “paid to look out” for the best interests of the national gaming industry.

“The gaming company members look out for their own interests, as they should,” Freeman said. “I believe the AGA is a tremendous asset to our members and the gaming industry.”

Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.