Wednesday, April 22, 1998 | 9:13 a.m.
Sen. Dan Coats Wednesday withdrew an amendment which would have eliminated the federal tax deduction for gambling tax losses, saying he did not have enough votes at present to win the fight.
Coats, R-Ind., said he is not giving up, but will just save the amendment for another bill.
Coats had wanted to use money saved from abolishing the gambling deduction to provide scholarships for low-income students.
"But it was clear after a pretty careful examination of where the votes were that we probably didn't have the votes to pass," he said.
Instead, Coats will suggest paying for the scholarships through technical changes in the Internal Revenue Service tax code.
His decision to back off the gambling tax break was a huge victory for the gaming industry. Lobbyists worried that eliminating the tax deduction would discourage customers.
"Of course, we're extremely pleased, but I expect we are going to see this battle again in the coming months," said Frank Fahrenkopf, president of the American Gaming Association.
Nevada Resort Association lobbyist Wayne Mehl said the amendment's withdrawal is "a victory in time, but in time only. This gives us a chance to catch our breath."
The gambling industry appears to be increasingly under siege in Congress. In 1996, lawmakers passed a bill creating a federal commission to study the industry's economic and social impacts. Last year, Sen. Orrin Hatch, R-Utah, considered but never introduced an amendment to ban gaming within almost two miles of schools and other public facilities.
Coats came under heavy pressure from Senate Majority Leader Trent Lott, a Republican from Mississippi, where gaming is growing in importance. Key Republican senators in horse racing states also weighed in to persuade Coats to look for another offset.
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