By the end of this month, Frank Fahrenkopf Jr. will have officially stepped down as the CEO and president of the American Gaming Association (AGA). For many, Fahrenkopf’s name is synonymous with that of the organization he heads—the two are often uttered in one breath—and his decision to leave has shocked the industry. It is difficult to think of the AGA without Fahrenkopf at the helm, but he has been closely involved with the executive board in the process for choosing his successor Geoff Freeman and has committed to making the transition as seamless as possible. Fahrenkopf leaves behind a wealth of accomplishments that mark the significant development of the AGA through the years and the transformation of a single idea into the influential organization that represents the gaming industry today.
Early Life
Fahrenkopf was born in 1939 in Brooklyn, N.Y., where he lived until he was about nine years old. His parents’ decision to get a divorce prompted his move across the country to Reno, Nev., with his father, who had been granted custody of him and his sister. Fahrenkopf spent his formative years in Reno and chose to stay there for his undergraduate education, attending the University of Nevada, Reno. From there he went to the University of California, Berkeley, to study law. And that’s where the spark that would ignite his career in politics was struck.
As Fahrenkopf tells it, he was at Berkeley during a very tumultuous time for colleges across America. “It was the time of the free speech movement,” he shared. “It was the start of the revolt on college campuses. I was really sort of turned off by what happened at Berkeley during the free speech movement. It was ill-veined. It wasn’t free speech, but the views of some extreme liberals—almost revolutionaries—who really disrupted the campus.” This sentiment stuck with Fahrenkopf even after he left Berkeley and returned to Nevada to begin practicing law as an associate at Breen and Young.
In 1967, after two years at the firm, he left to become a partner in Sanford, Sanford, Fahrenkopf and Mousel. During this time Fahrenkopf became quite active on the political circuit. His experience at Berkeley had brought about the realization that Republican ideals best suited him, and he joined the Nevada Young Republicans Club upon his return to the state. At the beginning, it was not a very successful group. Over the next year and a half, however, Fahrenkopf built its membership up to about 500. He enjoyed politics and his work within the club, and in 1970 he ran for national chairman of the United States Young Republicans. “I ended up losing to a good friend of mine who later went on to become a governor and congressman in the state of Tennessee,” Fahrenkopf said with a laugh. “But that is what got me fully involved in politics.”
In 1972, Fahrenkopf became the Northern Nevada co-chairman of President Richard Nixon’s reelection campaign. From 1972 to 1975, he served as general counsel to the Nevada Republican Committee. Then in 1975 Fahrenkopf won the election for state chairman of the Nevada Republican Committee. He was the youngest member by about 20 years.
Around this time, Fahrenkopf also helped found a new firm: Fahrenkopf, Mortimer, Sourwine, Mousel and Sloane (looking back on the name, Fahrenkopf agreed that it is quite a mouthful). He remained with this firm for a few years until President Ronald Reagan asked Fahrenkopf to become chairman of the Republican Party. “So first I was the Nevada chairman of the Republican National Committee for eight years,” Fahrenkopf clarified. “I was elected first chairman of the Western Chairmen by my fellow chairmen. Then, I was elected chairman of all the chairmen in the country. When President Reagan was elected, I was a trial lawyer; in those days, I couldn’t come to Washington, but in 1982—the first election that took place after President Reagan was elected in 1980—I was asked to become chairman of the Republican National Committee. I moved here to Washington for all of 1982, and I was sworn in as party chairman in January of 1983.”
A number of Fahrenkopf’s greatest achievements came while in Washington. Shortly after his move there, he helped found the National Endowment for Democracy (1993), and he also founded the International Republican Institute (1984). In 1986, he co-founded the Commission on Presidential Debates (CPD) with then-chairman of the Democratic National Committee Paul G. Kirk. To this day, the commission is highly regarded for its role in planning and moderating the quadrennial presidential debates.
Somehow, amid all this, Fahrenkopf also found time to work. In 1985 he was hired by the D.C. headquartered firm Hogan & Hartson (now Hogan Lovells). “It wasn’t easy balancing everything,” he said. “Luckily, I had a great wife who did a great job with our three daughters while I was messing around with politics and trying cases.”
The Beginning of the AGA
It was while Fahrenkopf was working as a full partner at Hogan & Hartson that the AGA was born. As Fahrenkopf explains it, the seed was planted during a discussion with friend and then-President and CEO of Hilton Raymond “Skip” Avansino, who was in Washington for a board meeting. “He came over and visited me in my law office and I guiltily told him that I’d spent all morning on Capitol Hill—which was true—with one of our clients and that the client was the American Pasta Association,” Fahrenkopf said. “He gave me sort of a double look at that, and I said, ‘Yes, the companies that manufacture pasta in this country have a trade association and lobbyists who work with the agricultural department and with the agricultural committees in the House and Senate to make sure that the federal government does not intentionally or unintentionally do something that harms their industry.’”
Fahrenkopf then commented on the lack of such an association in the gaming and hotel casino industries. “I fundamentally said, ‘Here you are, in the gaming industry and the hotel casino industry, with billions of dollars in capital investment in Nevada and New Jersey—and this was just about the time that river boat gaming started in the Midwest—yet you have no representation here in Washington, D.C. You really ought to think about creating a trade association to represent the industry.’” This conversation set everything into motion. Avansino then met with Barron Hilton, who was chairman of the Hilton empire, to discuss what Fahrenkopf had said. Hilton then called a meeting of CEOs of the nation’s top hotel-casino companies to discuss forming an association.
No progress was made, however, until the spring of 1994 when the Clinton administration proposed a 4 percent gross receipts tax on all U.S. gaming revenue. “That got their attention very, very quickly,” Fahrenkopf said with a chuckle. This proposition didn’t hang around for too long because about 30 governors signed a letter to President Clinton saying that they depended upon the gaming taxes in their states, and if the federal government took 4 percent, it would put their state budgets in some difficulty.
Although the Clinton administration’s proposal disappeared quickly, its potential impact stuck in the minds of those in the hotel and casino industry who had originally discussed forming an association. They decided it was time for their own lobbying group, and the American Gaming Association was born.
CEM Associate Editor Antinea Ascione observing a painting of the White House done by Judy Fermoile, an amateur painter in Reno and godmother to one of Fahrenkopf’s daughters. Fahrenkopf said that picture of the White House was one of former President Reagan’s favorites—he would always remark on it when he came to visit Fahrenkopf at his Republican National Committee office.
CEM Associate Editor Antinea Ascione observing a painting of the White House done by Judy Fermoile, an amateur painter in Reno and godmother to one of Fahrenkopf’s daughters. Fahrenkopf said that picture of the White House was one of former President Reagan’s favorites—he would always remark on it when he came to visit Fahrenkopf at his Republican National Committee office.
Phil Satre, then-chief executive officer of Harrah’s Entertainment, was one of those integral to the discussion that saw the AGA’s founding. As chief executive officer of one of the biggest names in hotel-casinos, Satre had a vested interest in the industry’s protection. “There were three main issues we had to look at,” he explained. “The first was that in 1993 and 1994, the [gaming] industry was really just exploding. The second issue was that there were a number of people who were coming out, leveling strong opposition to the casino gaming industry. And the third was that no one knew whether it would be a federal- or state-regulated industry. While we knew there would be federal involvement, such as taxation, we wanted to make sure it was state regulated. Given that, we decided we wanted to form an association based in D.C. Companies were going well beyond the borders in Nevada, and we wanted to represent the industry in America.”
Once the AGA was formed, there was talk of the organization’s leadership. “When we started talking about leadership, we felt that Frank, who had a long association with Nevada but was in D.C. at that time, had a high profile,” Satre said. “We all thought very highly of him. He was the unanimous choice to be the first president and CEO of the association.”
At first Fahrenkopf was unsure if he could accept such a responsibility. “They came to me to see if I would be interested in running it, and I wasn’t at the time,” he said. “I was an international trade lawyer—I was traveling all over the world and I just didn’t think I could do it. So they went out and hired a headhunter firm and interviewed a great many people and finally, after a number of months, the search committee—which consisted of Steve Wynn, Chuck Matheson, then the president of IGT, and Satre—said, ‘Well, do it for a year; get it started.’”
Fahrenkopf agreed that he would help get the AGA off the ground and worked out an agreement with his law firm that allowed him to take on the additional responsibilities that would come with working to found the AGA. That was 18 years ago.
Early Challenges
The AGA was barely formed when the gaming industry was faced with a challenge—and this one would not disappear as easily as the tax proposal. “We were in that office for about two weeks to a month when the movie Casino came out,” Fahrenkopf shared. “It doesn’t paint the gaming industry in a very good light. So one of the initial challenges—and it continues to be a challenge—was to change some of the stereotypes and images that are out there that are not present and haven’t been present in our industry for years.”
As Fahrenkopf tells it, counteracting the negative public stereotypes that often surround gaming is an ongoing battle.
“There’s no question in my mind that the news media in this country are overwhelmingly anti-gaming,” Fahrenkopf said. “Just about the time the Wall Street Journal or USA Today would have a reporter who was covering our industry, and they finally understood the mob was gone and that we are a major, mainstream industry employing hundreds of thousands of people, paying millions of tax dollars to state, local and federal governments, they would switch to another beat. Suddenly there would be a new reporter covering us, and the first question out of his or her mouth would be ‘Is the mob still running [the gaming industry]?’”
The gaming industry and the AGA also found itself faced with an anti-gaming movement in Congress. Remarkably, the movement found support from both sides of the aisle, Fahrenkopf noted. “Gaming opposition tends to consist of the people in the Republican Party who are the most conservative. They don’t believe government should be telling people what to do, but because of their religious views or moral views, they believe that gaming is a sin,” he elaborated. “And in the Democratic Party, it’s those on the far left. They don’t care so much about the sinning, but they don’t think people are smart enough to make their own decisions about how to spend their own money and the government needs to protect them from themselves. So you had this strange meeting of extreme right and extreme left who were behind the creation of an anti-gaming commission that was created with the expressed purpose of ending legal gambling in the United States.”
It was evident that this commission posed a threat, as did the study on the dangers of the gaming industry it aimed to produce. Over the next few years, Fahrenkopf and his staff worked to ensure that the study would reflect the truth about the gaming industry and its many benefits.
“We were fortunate to be able to achieve two things,” Fahrenkopf said. “One, we were able to get three people who knew something about the gaming industry onto the nine-member committee—Terry Lanni, who for many years was the president and CEO of MGM Grand; Bill Bible, then-chairman of the Nevada Gaming Control Board; and then-head of the Culinary Workers Union John Wilhelm, who was a powerful figure overseeing the largest union presence in the gaming industry.”
Through these three men, the AGA was able to ensure the commission would have some balance as it held hearings and gathered evidence throughout the United States. The AGA also did its best to counteract misperceptions about the industry with evidence and testimonies from people in gaming.
“The second thing we achieved is what the report showed,” Fahrenkopf said. “When the final report came out in 1999, of all aspects of legal gambling in the United States, it was our industry that came out the best. We were in fact commended by that commission—six of the nine members being opposed to gaming—for the work we were doing for the National Center for Responsible Gaming in providing the only money that was going into research to help people.”
Development
Since its inception in 1994, the AGA has developed rapidly, helping make strides in gaming legislation, ensuring the public is properly educated on the industry and developing initiatives that provide forums for discussion and avenues for growth. The AGA has seen sustained development over its 18 years and has grown into a prominent and well-respected organization. This is in no small part due to Fahrenkopf, AGA Senior Vice President and Executive Director Judy Patterson, who has worked with Fahrenkopf since the AGA’s inception, and the many highly competent and committed staff members they have overseen over the years.
When asked what has been the key to the AGA’s growth and the respect it has achieved, Fahrenkopf insisted it is trust. “In this town, you’re only as good as your word,” he said. “Your word is your bond. You have to engender trust so that when you talk with members of Congress or someone in the administration they know you tell the truth, and that what you tell them on a particular subject is backed by supportive evidence.”
Fahrenkopf meeting with former President Richard Nixon before Nixon’s speech at a Republican Governors’ Association event in 1987.
Fahrenkopf meeting with former President Richard Nixon before Nixon’s speech at a Republican Governors’ Association event in 1987.
The gaming industry’s code of conduct has also played a part in inspiring trust, Fahrenkopf said. “One of our greatest achievements was getting the members of our industry to agree to a code of conduct, particularly a code of conduct concerning underage gaming and the responsibility we have in how we handle our advertising and so forth.”
And of course, the AGA’s initiatives have played a significant part in establishing the organization as an industry leader. The creation of the National Center for Responsible Gaming (NCRG) has played a significant role in showing the AGA’s commitment to assisting those who battle gambling addictions. Founded in 1996 under Fahrenkopf’s guidance, the NCRG funds independent, peer-reviewed research into the root of pathological gambling, and the findings assist in the prevention of gambling addictions and the development of treatment. Its formation is one of Fahrenkopf’s proudest accomplishments.
“When we began the AGA, almost immediately we tackled the whole question of responsible gaming,” he shared. “When I accepted this job, one of the first things I told that board is that we as an industry could not make the mistake that the tobacco industry had made by testifying—under oath—that tobacco was not harmful to your health. I was aware that there are a certain percentage of people who can’t gamble responsibly, who we call pathological gamblers, and if we were going to grow our industry, we had a duty to ascertain what that percentage is and try to help them. The board unanimously agreed at that first meeting that this was a priority.”
By happenstance, Fahrenkopf met Dr. Howard Schaffer, an associate professor of psychiatry at Harvard Medical School and director of the Division of Addiction at The Cambridge Health Alliance, a Harvard Medical School teaching affiliate. After discussing this need to assist pathological gamblers, the two explored an agreement in which the gaming industry would provide funds with no strings attached for research in this area. This led to the official creation of the NCRG, which, over the past 15 years, has become one of the preeminent organizations in the world for peer-reviewed research by leading scientists, caregivers, psychiatrists and others who work in that field.
The AGA’s two trade shows, Global Gaming Expo (G2E) and G2E Asia, have been an integral part of the organization since G2E began in 2001. “We were in business for about two years when I realized at that time there were three shows done in the United States every year—there was one in Las Vegas in September, one in Las Vegas in December and one in Las Vegas in the spring. And I got thinking one day and decided that we should have our own show that could generate revenue for the trade association.”
At the time the AGA was busy battling the anti-gaming commission, so time and attention could not be focused into developing a trade show. Fahrenkopf and his staff opted to enter into an agreement with the organizers of the World Gaming Congress & Expo. The AGA established a revenue-sharing agreement and partnered with that show’s organizers for about five years. “At the end of five years, we decided it was time to form our own show, and that was the start of G2E,” Fahrenkopf said. “We entered into an agreement with Reed Exhibitions, and they’ve been our partners ever since.”
It was when the world began to take notice of the rapid growth of the gaming industry in Asia that Fahrenkopf realized it was crucial they take G2E across the waters—far across them. “The growth in the industry has really taken place in Asia over the last 10 years, beginning in Macau and now in Singapore,” Fahrenkopf explained. “We are also seeing expansion going on in the Philippines, Vietnam and other nations. So seven years ago we started G2E Asia, and that’s been a very, very successful show.”
Fahrenkopf said these trade shows, along with the AGA’s other initiatives, have helped give the association the credibility that has fueled its influence and subsequent development. And the AGA’s commitment to building and developing programs that benefit those operating in the gaming industry continues. Just last year the organization began a program focused on women in the industry. Global Gaming Women operates with the goal of supporting the development and success of women in the international gaming industry through education, mentorship and networking opportunities.
The Next Chapter
The news of Fahrenkopf’s plans to step down surprised many in the industry, but Fahrenkopf believes it was a good decision, not only for him but also for the AGA and the industry. “I just think that after being in the same position for 18 years, it was time for me to refresh myself by doing other things,” he said. “Furthermore, it’s always good for an organization to have change at the leadership level and get someone new with some fresh ideas and concepts. I’ve got a great staff here that I’m sure is going to stay on and help.”
Although Fahrenkopf’s plans to step down from the AGA were only publicly announced earlier this year, Fahrenkopf and the AGA board have been preparing for his departure since 2011. “I think that anyone who is the president and CEO of a corporation or organization such as the AGA has a duty to think about succession planning,” Fahrenkopf said. “I began thinking of succession planning two years ago, and I decided—and my board agreed—that June 30 this year would be the time when I would step down. We made that decision in December of 2011.”
But why keep such information so tightly under wraps? “We kept this a secret because we were still hopeful that during 2012 we would have an online poker bill introduced in Congress by Senator Reid and Senator Kyl,” Fahrenkopf explained. “I didn’t want to make myself a lame duck by announcing that I would be leaving. We were, of course, disappointed that the bill never got introduced, but immediately after the lame duck session was over, I announced that I was going to step down.”
Fahrenkopf will continue to serve as a consultant to the AGA through the end of the year to assist with the transition. He supported the AGA board in reviewing candidates for his replacement and in the recent selection of Freeman as the new AGA president and CEO beginning July 1.
Freeman will join the AGA with seven years experience at the U.S. Travel Association under his belt, having most recently served as the association’s executive vice president and chief operating officer. “I am honored to take on the challenge of representing the dynamic commercial gaming industry,” said Freeman when asked how he felt about his new position. “The industry has evolved a great deal during the past 20 years, and Frank and the talented staff at the AGA have been instrumental to the industry’s success. I look forward to building on those achievements – strengthening partnerships and advancing policies to ensure the continued growth of the industry in the years to come.”
Many gaming industry leaders have expressed that they are sad to see Fahrenkopf’s departure but applaud his accomplishments and the tremendous amount of work he has put into the industry. “This [choice to step down] was an important leadership decision by Frank,” Satre said. “I think it’s also a personal decision; he has been in his role for almost two decades, and that’s a very long time. He called me when he decided to step down, and he sounded enthusiastic so I am confident that it’s the right time for him. He’s been a great leader and made incredibly progress on behalf of the industry, and we’re going to miss him. He has big shoes to fill.”
And where does Fahrenkopf see himself after he makes this change in the course of his life’s narrative? He was less than eager to get into specifics. “My obligation at the moment is to serve this industry until June 30 and then I will announce what my final decisions will be,” he said. But he did mention that he is exploring a number of different opportunities, including teaching. “Primarily in programs that revolve around politics,” he specified. Fahrenkopf plans to continue his work with the Commission on Presidential Debates and is considering offers to join various boards of directors. He plans to try his hand at some writing and is working with a biographer who plans to produce his official biography. Considering the knowledge he has amassed over his time in the industry, Fahrenkopf also sees himself doing some consulting, both in the general area of politics and in the gaming industry. “I know a little bit about this industry after 18 years,” he joked.
Akin to Mary Poppins—sans the large bag and umbrella—Fahrenkopf stepped in when needed, and now that he knows things can run smoothly without him at the helm, he is making a most graceful exit.