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AP Photo/Harry Hamburg
Senate Majority Leader Harry Reid meets reporters on Capitol Hill in Washington, Thursday, Dec. 2, 2010.
By Liz Benston, Karoun Demirjian (contact) 
Tuesday, Dec. 7, 2010 | 2 a.m.
Reader poll
Sun Archives
- Harry Reid pushes bill to allow for online gambling (12-3-2010)
- Nevada gaming companies see potential flush online (8-2-2010)
- Online gambling is illegal, but betting sites’ logos often in Nevada casinos (7-13-2010)
- Online poker law in effect, but players still manage to bet (7-11-2010)
- Question evolving from legalization debate: How to tax online casinos? (5-24-2010)
- Lawmakers push to regulate, tax online gaming (5-19-2010)
- With aggressive push, Internet gambling again in play (2-9-2010)
- Why casinos in Nevada won’t go online (for now) (8-20-2009)
- Will Web poker bust spark fight or flight? (6-15-2009)
- Poker players swarm site seeking input on big issues (5-19-2009)
- Web betting is wedge for Big Gaming (11-25-2008)
- Bush administration moves on Internet gaming band (11-12-2008)
- Gaming’s new frontier (11-23-2007)
- Online gaming in the shadows (7-17-2007)
With just days left before the 111th Congress calls it quits, Senate Majority Leader Harry Reid is taking what’s almost certain to be his last, best chance for a while to fast-track an effort to legalize Internet poker and deliver a prize to some of his biggest backers.
Reid has been circulating draft language for a bill that would create a licensing system for companies hoping to operate legal online poker forums in the U.S., establish federal regulations to police the new system and let both states and the federal government reap profits from this $25 billion industry.
But Internet gambling is as controversial in Washington as it has historically been in the gaming industry, meaning that while the lame-duck session is likely Reid’s best chance to push something through, it’s still going to be a hard road.
The bill is a work in progress, but opposition is in full swing on the Hill, where critics are lobbying against it on both moral and fiscal grounds.
Ranking Republicans of the House’s three committees with jurisdiction on Internet gambling — Spencer Bachus of Financial Services, Dave Camp of Ways and Means, and Lamar Smith of Judiciary — are lobbying the Senate against taking up any measure that “might be partially motivated by one of the gravest sins that afflicts this Congress: desperation for more tax dollars to pay for ever-increasing federal spending.”
“Creating a federal right to gamble that has never existed in our country’s history and imposing an unprecedented new tax regime on such activity require careful deliberation, not backroom deals or earmarks or special interests,” they wrote in a letter sent to Reid and Senate Minority Leader Mitch McConnell — who has historically opposed Internet gambling.
The letter amounts to little more than emphatic opposition from the minority. But in a few weeks, those same Republicans enter the majority in the House, from where they could easily stop similar legislation, adding to the urgency for Reid to work fast.
Lobbyists guess that the bill could hit the Senate floor as early as next week.
Reid won re-election with the backing of Nevada’s biggest gaming operators. For example, Caesars Entertainment facilitated union efforts to drive up voter turnout among members. And MGM Resorts CEO Jim Murren endorsed Reid in campaign ads.
Mainstream Republican opposition to legalization of online gambling has always been fierce. In 2006, one of the last acts of the Republican Congress was passing the Unlawful Internet Gambling Enforcement Act, which outlawed all forms of gambling online — and, advocates say, helped to drive this offshore business further underground.
Reid’s bill is still in flux, but at the end of the day would legalize only poker. That is as far as Reid, who opposed all forms of Internet gambling until just a few months ago, is himself willing to go.
Still, if it passes, it’s likely to bring about a sea-change in the gambling industry.
Poker’s popularity has boomed in recent years, and the online share is a $25 billion global industry with 15 million paying American customers.
Although the American Gaming Association is staying mum on the proposed legislation, it supports Internet gambling legalization as a way to boost business.
States will ultimately oversee the licensing and see the bulk of the revenue generated. But they would have to give the federal government a 20 percent cut as an annual fee to sponsor the licensing.
Internet gambling observers call Reid’s proposed bill the most nuanced and realistic effort to legalize Internet gambling by seeking a compromise among a complex web of business and government constituents.
By focusing on online poker, the bill is more politically palatable to industry opponents who view online poker — with an established base of customers who gamble from home computers — as little threat to their bricks-and-mortar operations.
The bill also considers the role of various regulatory schemes, including tribal regulators of casinos, and the rights of individual states to govern gambling within their borders.
Reid’s bill would outsource federal regulation to states or tribal governments with “extensive experience and a proven track record” of regulating gambling and allow states to opt in or out of a federal regulatory system.
Further, the bill tackles the touchy problem of how to handle the foreign companies that have long accepted bets from Americans, in violation of the Justice Department’s ban on Internet gambling.
Rep. Barney Frank, D-Mass., has introduced legislation to repeal the 2006 ban on Internet gambling.
Proposed language wouldn’t exclude these offshore companies upfront, as Massachusetts Rep. Barney Frank’s previous attempt at Internet gambling legalization would have done. Instead, any gambling operator can apply for a license in the Reid bill. And yet, proposed language would allow only operators of existing casinos or racetracks to obtain licenses in the two years after regulators issue the first Internet poker license.
This provision, one of the most controversial in the Reid bill, is a reasonable compromise, although it has upset poker players who view it as unfairly benefiting Nevada casino giants over their favored gambling websites, said Dan Michalski, founder and editor of Pokerati.com, a Las Vegas-based poker blog.
Some lawmakers and their constituents view these foreign companies as lawbreakers. And U.S. casino companies probably wouldn’t support an equal playing field for Web casino operators, given that the U.S. companies have waited on the sidelines for more than a decade for the chance to make money online, Michalski said.
“This kind of puts (the online operators) in the penalty box for a while and says, ‘We might let you in but you’re certainly not going to be the first in line.’ I think that was to be expected.”
Other key language leaves open the possibility that American casino companies could partner with Internet companies to license software, brand names or Web portals where potential customers gather and obtain coupons and other enticements.
Although Nevada’s casino giants no doubt want the first crack at the Internet gambling market, they and others need the specialized expertise of Internet operators that have been cultivating this business for years, according to a source who requested anonymity.
“This is going to be a horse race to see how fast people can partner with the Internet gambling operators, because no one is really ready for this in the U.S.,” the source said. “These are sophisticated systems. You have to build them, and then it takes time for it to ramp up before you can implement it.”
U.S. companies will need to tap player databases and technology owned by foreign operators to succeed, although they are estimated to generate less in earnings than investors have expected, in part because smaller operators have more limited opportunity to capture players, according to a report by gaming industry analysts at Morgan Stanley. Analysts concluded Monday it was “too difficult” to handicap the bill’s passage.
While addressing the business concerns of sometime opponents of Internet gambling, the bill probably won’t survive attacks from Republicans who have pledged to block bills backed by Reid and the Democrats, said I. Nelson Rose, an attorney and Internet gambling expert in California.
“Even though Democrats still have the majority, the perception is that Republicans are in charge,” Rose said. “And being the party of ‘no’ has worked in Republicans’ favor.”
No mention of the 15 month waiting period?
You voted for him, dipstick, enjoy him.
Three things are certain if this goes through- it will help the gaming companies, the companies will use overseas labor for the gaming websites, and it will not bring one job to Nevada.
Wait a minute, four things- Harry Reid will get more campaign donations.
So, this is how the wonderful Sierra Harry is going to help Nevada's gaming industry, eh? Well, you folks who bought his campaign BS and voted for him can now reap the misery of your folly. "THERE ARE NONE SO BLIND AS THOSE WHO REFUSE TO SEE"
My,My but Harry sure is in a hurry to do the bidding of his casino bosses. And just think, with unemployment benefits extended (once again) the unemployed can stay home and use that money playing Internet poker.
This country is in very serious trouble and this dolt is out paying back his donors. What a loser.
Quit trying to regulate morals and individual preferences that cannot be controlled by fiat as long as they do not infringe upon another. While I am for legalizing Internet gambling, it's the process Harry the Red uses to get his pet projects through that disgusts me. Why is prostitution illegal in most jurisdictions when it is alive and well in Washington, D.C.?
Oh yes, let's not ensure a level playing field for our casinos. This will likely help our gaming industry, as online poker won't take business away from local casinos and may very well encourage online players to come here to play in person. And by doing this in a way that doesn't hurt our casinos, our people don't lose their jobs. What's so horrible about this?
I thought teabaggers were about more "freedom". So what do they have against online poker? And against gaming, for that matter? Does anyone here really want to see what Nevada would be like with no casinos?
I wonder what LDS Church officials think about this move by Brother Reid?
Embarrasing is what he is---for plenty of reasons, this is just another.
No, I'm not saying he should base his political beliefs on what LDS Church leaders say, but LDS Church leaders have called this a moral issue. Gambling is a moral issue.....and here's Brother Reid PUSHING hard to encourage more gambling.
QUESTION?
How does internet poker stop 4 or 5 people with laptop computers from sitting in a dorm room or garage/rec room and playing together at a table?
Nother question?
Why doesn't the backers of internet poker ever answer this question
Nother question?
What law [other than Hoyle] whould these folks be breaking?
I'm sure his legislation will reduce the unemployment percentage in Nevada by at least 3 percentage points. What in the world is going on in Washington, DC?
The American public is already playing poker on line to the tune of about Six Billion Dollars a year.
It is about time that that American Money gets to stay in this country. It is all leaving the country and not being taxed now.
They are not making it easier, just making it legal so they can tax it. It is easy already. Anyone of you could be playing within the next five minutes if you wanted to but your money would be leaving the country never to be seen again.
Most every major gaming company already has games in place and ready to go on line, they just need the green light to do so. To the surprise of many, those games where developed right here in Nevada and just need to be tested and approved by Nevada Gaming.
Time to keep the money at home folks. Thanks Mr. Reid for finally doing something that most of the public does want you to do. Much better then that "Dream Act" that we don't want.
Hey, Give Harry a break...
He has bills to pay, just like the rest of us...
People, until we get serious about campaign finance reform, this is the garbage we will put up with.
Every single issue that voters get worked-up about (gay marriage, gun laws, drug laws, etc.) has less effect on your daily life than campaign finance reform, but the issue isn't sexy, so no one wants to bother with it. If these guys couldn't buy votes, and if they didn't have to to keep their jobs, maybe they'd vote with their consciences.
As long as the elctoral system stays the way it is, the prize goes to the highest bidder. There's a reason that the supreme court uses an appointee system. One branch of Congress used to as well, but that was sold-out to make sure the system did not work in favor of the little guy. Can't have those representatives doing the right thing if it costs some rich guy money. All under the guise of "accountability to the electorate".
By the way, when I refer to a "rich guy", I'm not talking about someone who makes 250k a year.
Finally some common sense from a member of Congress. This bill needs to pass. Making online poker "illegal" is about as "successful" as Prohibition. Next, online sportsbetting should be legalized, to give some viable competition to the Nevada sportsbooks, most of which are scared of their own shadows and don't want to take reasonable action.
Washington STATE made online gambling a FELONY long ago -- along with buying tobacco online, padding one's resume, and parting out your car without a wrecker's license. A FELONY, which strips those convicted of basic liberties, like voting and being armed. Defined as "1. an offense, as murder or burglary, of graver character than those called misdemeanors, esp. those commonly punished in the U.S. by imprisonment for more than a year. 2. Early English Law . any crime punishable by death or mutilation and forfeiture of lands and goods."
Despite dipstick's endorsement of a bigger police/nanny state to save all us consenting adults from ourselves, the state promise has always been to leave us alone unless we cross certain thresholds. Like actually injuring another.
An excellent example of what We have allowed this police state to become on a municipal level is found @ http://www.youtube.com/watch?feature=pla...
"Quit trying to regulate morals and individual preferences that cannot be controlled by fiat as long as they do not infringe upon another. While I am for legalizing Internet gambling ... Why is prostitution illegal in most jurisdictions when it is alive and well in Washington, D.C.?"
lvfacts101 -- excellent points made. You might be interested to know one of the early definitions of a prostitute included a public officer, especially a judge, who sells his office's favors.
"The legitimate powers of government extend to such acts only as are injurious to others." -- Thomas Jefferson, Notes on the State of Virginia, 1781-82
That has got to be the quickest payback to a supporter ever. Dirty Harry paying MGM and Harrah's back for their support. I think the FBI and Justice Department should look into Harry's involvement.
How obvious can you be, Senator Reid?
Help me get reelected and I will push this bill for you, Loveman and Murren.
It's like a bad movie.
Not going to comment on how this is getting done, because all politics are dirty, but I think this will be good for the country and the state. Federal tax revenue. State tax revenue. Based on the description of the bill that I've heard, it would require servers and the majority of the employees to reside in the state where the license was issued. I don't think the moral risk is any greater than what we have with our existing casinos, which now are available to everyone across the country. I don't like the argument that "if it's already being done, we might as well tax it, regulate it, and make some money off of it". I think the government does have an obligation to protect us from ourselves in certain situations. But I don't think internet poker falls into that category. I think games of skill are MUCH better than games of luck/chance, like slots or lotteries.
To pmmart, regarding 4-5 people sitting in a dorm room gaming the other player...I think that's a major concern that the providers are addressing through IP address searches and trends/patterns with different gamers. It's a legitimate concern, but it sounds like it's a known issue that's being addressed.
Unless there's an enforcement structure in place, and cyberspace is proving very difficult for big brother to regulate, this will probably not generate nearly the tax revenue nor corporate profit they think. Players will simply gravitate to the best sites, legal or not, as they have been doing for years. As music downloading has shown for years and WikiLeaks is showing now, government control of cyber space is quickly amounting to a choice between "anything goes" versus a PBS-like government controlled & censored very expensive bureacracy (no offense to PBS, but hopefully you get the idea).
Harry youre pathetic- how about jobs- Heres the payback to the casino companies- have you no shame
To some, paybacks are hell. To Harry Reid, paybacks are just money.
Hang in there, Harry. We know you are just paying off your IOU's...
Although I am personally against legalizing on-line gambling, I'll leave it to the legislators to decide the issue.
What struck me as interesting is the thought that Harry Reid's handling of this matter is a clear example of how politics works in America. He is paying back his large campaign donors for their support. I don't get the impression that he is considering any other constituents' interests.
America works well for the rich and powerful. The rest of you, not so much.
Internet poker should be legalized already. The fact that it's illegal is simply idiotic.
I'm so glad Harry is putting all his effort into getting this passed. All the concern about jobs, economic stimulus, getting the country back to work, unemployment benefits, immigration, needs to take a back seat to this critical piece of legislation. Our very future is depending on it.
Harry
Your time would be better spent on helping Americans
No doubt if this passes, We will hear more stories about people gambling their paycheck, rent, etc. without ever even leaving their home. This will only hurt the weak among us. At least now, you have to make the effort to go to a casino or lottery outlet to do your gambling.
Unfortunately while a few good poker players may actually win, the majority will lose. I personally would rather see the actual cards being dealt, not an electronic card which the computer (dealer) has total control over what comes up next.
Online gaming is bad for America, regardless of what party one is a member of. Harry could find something more important to work on, how about unemployment, for example.
http://news.yahoo.com/s/ap/20101207/ap_o...
Here is our great Senator Harry Reid, who I supported and voted for, being bought out by the large gambling corporations. This legalization of online Poker, as another commentator noted, will not bring a single job to NV, as the processing will probably be outsourced to India or China. Tsk, Tsk, Tsk, Mr. Reid, you are 70 years old and were elected, I supposed, to help our country and, especially, NV; so why are you not doing so? I have mentioned certain other methods to help NV, yet you choose to immediately repay your benefactors; for the sake of the select, the rich, and not for the jobs for the masses of NV, who got you reelected.
He knows it won't pass so no harm in exciting the locals. This is PR bs.
Well, now you know what politicans do for a living: accept "GRAFT," ala campaign, lobbyist, and other contributions - which fill their coffers.
NOW, Harry will help put the LAST NAIL in the coffin of Las Vegas and Atlantic City - and complete the ruin that began with this economic recession. Because as visiting Las Vegas and cost of air travel gets more expensive each year, people who formerly came here for the gambling and shows, etc., MAY NOT COME BACK - if they can gamble in the comfort of their own home, ON-LINE, using the money they would have otherwise spent in Las Vegas.
The thrill is in the game; not the location. And since Las Vegas casinos have become so cheap (with comps, etc.) they squeek - as Liz Benston suggests - I believe this WILL be a "sea-change" for the entire gambling industry. Just as Indian Casinos started as a (not seen by Las Vegas as) competative drain on Las Vegas tourism; now, Harry Reid will finish it.
Even if some segment of people still want what a Casino (e.g., Las Vegas or Atlantic City) has to offer - they may not be enough to support the financial bottom-line of Las Vegas Casinos. And the more than 180 Indian Casinos - located all over the country - offer similar shows and venues that people will not have to travel very far to get.
If this Internet Gambling Bill passes - it will open the door for anything to be possible in the future. The camel's nose will be under the tent, and saying "Good luck" in Las Vegas will take on a whole new meaning for its casinos.
Don't give up on Harry. Where there is a will, there is a way.
Harry is trying to attach an Internet Gambling Bill as a rider to the Tax extension bill...
If Harry can't shove his Internet Gambling Bill through Congress in the next few days, he will be in deep trouble with the Casino people who gave Harry all of that campaign money...
atdleft: you rant in an incoherent way, buddy. What do you know about the TEA Party? Attend a meeting and you might come away a changed person. I'm a member, supporter and contributor to TEA Party causes and I am for on-line gambling, legal prostitution & legalization of "recreational" drugs. I am also dead set against the use of "recreational" drugs because they will eventually control the user but I agree it's up to the individual to choose, not me, as long as they do not harm others in doing so.
So Nevada voters are waking up to the sad fact that our trusted politicians can NOT be trusted. Senator Reid and Senator Ensign have biz to take care of, that is clearly not in Nevada peoples' interest. Senator Ensign protects corrupt MSHA officials and Corp Mining interests here in Nevada, Senator Ensign HAS shown in correspondence to Paul Rupp(Miner)that any timely complaint filed asking for an investigation into health and safety violation's here in the Nevada mining industry will NOT go forward. . .for a cab fire inside a moving 400,000 lb haul truck unless the fire rages for 30 minutes or the miner dies= NO RIGHTS FOR SHIFT MINERS. . . Thanks Senator Ensign And Senator Reid for standing up and PROTECTING the folks that you guys really represent. PRupp B125 SP NV 89047
I don't know a lot about the las vegas economy, however it seems to me, that there is an overwhelming housing excess in the las vegas area, and a lot of unemployed folks. How about if we legalize internet gambling and then reid gets legislation passed in the state to shrink the business tax on companies that set up shop in vegas at nearly 0%. I would think this would create jobs, lead to occupancy in business parks or new construction of them, as well as push money into the local economy with the jobs. Plus as an added benefit the money the folks make they can just go blow at the casinos and the money never leaves las vegas.
What a terrible idea!!!! So you want to legalize something that people might need to go to Las Vegas to do???? Nah, I'll stay home and avoid the checked bag fees and TSA pat downs -- let's come up with another way to NOT get tourists to Vegas!!
im one of those 'stupid' people that vote for who i think will do 'good for the people.' i agree with DIPSTICK who states that online gaming will hurt the family. i also agree it should be legalized & let people make their own decisions re: their sucess or downfall.
JERRY states prostitution should be legal. again, while i dont participate, i agree it should be lagal AND TAXED.
sorry LEE, on-line gaming WONT reduce the unemployment rate in nevada. i actually believe it will hurt it just as the proliferation of gambling in many other states have.
im in my 50s & VEGAS & hawaii have always been the top 2 vacation spots for americans. the problem is with on-line gaming the average american (making 35-50k a year) wont be able to visit VEGAS if they are losing their mortgage payment on-line.
KILLER B put up a link to a news story that i enjoyed watching. while the story doesnt go into WHY they want to evict him (back taxes, not meeting local restrictions) i fully agree to 'live & let live.'
i hope VEGAS recovers soon as i have been 'vacationing' there the past 25-30yrs and, god bless, i will be able to visit your GREAT CITY the next 25yrs. i enjoy the free room offers, free food & free play offers i get every few weeks. i also enjoy the off strip places where my neighbor from BELLVILLE CANADA plays. he is a low roller who, despite being from another country, enjoys VEGAS & the locals & downtown places. they offer just as much fun & enjoyment as your strip hotels & at a much better value.
GOOD LUCK to all in the valley.