September 12, 2012

US Senators fight over online poker as time grows short

Nevada’s senators remained in turmoil and now in open attacks on each other Tuesday over online gaming, as time runs out for Congress to consider a bill sought by the casino industry and millions of card players to legalize online poker. The chance of a federal law passing allowing online poker now seems highly unlikely.

Republican Sen. Dean Heller insisted that industry players and Democratic Sen. Harry Reid had agreed on a strategy that would have the U.S. House act first on a gaming bill, until Reid “decided to change gears midstream.”

Reid said Heller’s statement was fiction, and accused him of “failure of leadership.”

Reid said he has never strayed from pushing the legislation through the Senate first, where as majority leader he has control over the voting process and schedule. Behind the scenes, Reid aides continued to charge Heller was masking an inability to attract Republicans after being asked to produce at least 15 GOP votes for the bill.

Finger-pointing between the two Nevada leaders surfaced as crunch time nears on a bill that seeks to legalize and regulate online poker on the federal level while toughening restrictions against other forms of Internet gambling. A legalized market for Internet poker in which most states would be expected to participate would mean millions of dollars in business for casinos that are positioning themselves for the next big thing.

But the bill faces opposition from states that were given the green light by the Justice Department in a reinterpretation of the 1961 Wire Act last December to pursue their own legalized gambling. More than 15 are moving to do so. In addition to states rights advocates, some Indian tribes and lottery interests remain skeptical of a gaming initiative they perceive as tilted in favor of Nevada.

In addition, strained relations between Democrats and Republicans in advance of the November presidential election has closed the floor to all but the most noncontroversial measures.

Nevada senators are feeling the pressure to deliver to the casino industry that represents their biggest financial backers, some lobbyists speculated. There are only days remaining before Congress recesses for the elections. Lawmakers will reconvene in November for a lame duck session that will represent a last-ditch opportunity to pass a bill this year.

Reid on Tuesday lamented that six months of work on a Senate gaming bill was lost after Heller sent him a letter Monday that said, “as discussed, it would be beneficial for the House of Representatives to first address this issue.”

“It’s really unfair to Nevada and I’m just terribly disappointed,” Reid said. “It’s too bad, because we have all been ready to move on this for a long time.

“But it’s really failure of leadership of my friend,” Reid said of Heller.

Heller said the poker bill has not been finalized or introduced, and until then it is unrealistic to expect senators to commit to a vote. He bristled that Reid’s office called on Friday and gave him a Monday deadline to round up 15 votes.

“This was never going to happen before the lame duck session, so why all of a sudden all the noise today doesn’t make sense to me,” he said. He maintained it made little sense to pass a Senate poker bill that could be ignored by the House.

Under Heller’s scenario, the Republican House would pass a bill to undo the Wire Act ruling and toughen laws against gambling on the Internet. Under that reasoning, when that bill reaches the Senate, an exemption for poker could be added.

Heller told reporters that Rep. Lamar Smith, R-Texas, the chairman of the House Judiciary Committee, was preparing a Wire Act bill. An aide called reporters later to walk back Heller’s remark, saying there have been discussions with Smith but no commitment for such a bill.

Some lobbyists and gaming executives were scratching their heads about the “House first” strategy. House Republican leaders have shown little appetite for gaming, and casino magnate Sheldon Adelson, an online gaming opponent, reportedly has the ear of House Majority Leader Eric Cantor, R-Va.

“The House doesn’t want anything to do with this,” said a lobbyist involved in the issue.

A Las Vegas casino executive close to the issue said the House strategy had come up only peripherally in talks on the bill, and so it was a surprise to see it suddenly put front and center.

As recently as two weeks ago, strategists for both senators appeared focused on identifying potential Senate votes and procedural challenges of getting a bill through the Senate, said the executive who asked not to be named so as not to come between Reid and Heller.

“I was surprised that things fell apart, and surprised that there was an expectation that somehow this was going to start in the House,” the executive said.

But a Republican lobbyist said the House strategy was the only alternative to a Senate that has been badly polarized, particularly on a bill that would be submitted at the last minute, had not been vetted by a committee and was being forced to a vote.

“I have no idea what number of votes you would get on the Democratic side, but on the Republican side it wouldn’t matter if this was a bill to cure cancer… The instinctual reaction was going to be, ‘No, thank you,’” the lobbyist said.

Where online poker and its millions of fans go now is back to hoping for state by state legislation, as their leaders in Washington cannot seem to ever agree on anything.

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