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December 20, 2014

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Finger pointing turns to gaming industry as hopes dim for online poker bill

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Steve Marcus

Sens. Dean Heller, left, and Harry Reid attend a Memorial Day ceremony in Boulder City on May 30, 2011.

Updated Friday, Dec. 14, 2012 | 3:09 p.m.

The top policy-making senators on online poker are agreed: The chances that a federal online poker bill will pass before the end of 2012 are nil.

“Two weeks before Christmas, without being vulgar, what the hell would I put it on?” Sen. Harry Reid said this week, referring to his effort to find a bill to which he could attach a poker amendment.

And, today, just days after that complaint, Reid officially called it quits on online poker for 2012.

“As much as I would prefer a different outcome the reality is that we have simply run out of time in the legislative calendar to pass an Internet poker bill," Reid said. "I am disappointed but Senator Heller and I remain committed to this issue and it will be a priority for us in the new Congress.”

For months, Reid has complained that Republicans have not come up with the votes necessary to advance legislation legalizing online poker through Congress.

But now, his top policy adviser has another bone to pick: with the industry.

“The AGA had met with a lot of people and claimed they’ve done a lot of other visits,” said David Krone, Reid’s chief of staff. “But unfortunately, I haven’t seen that turned into votes.”

The American Gaming Association does not represent every casino interest on the Las Vegas Strip, much less every gaming stakeholder in the country. But in Washington, it is the unofficial leader of a body of lobbyists who have spent the past four years pushing for an online poker bill.

In that time, the poker industry has been near-unanimous in its support for some form of federal intervention to legalize betting in Internet poker games and clarifying that poker is the only form of online gambling that is allowed.

But even lobbyists admit that the industry has not been speaking with a single, clarion voice about what that fix should look like — leaving room for doubt that those on the fence about online poker can wallow in.

“This is an industry of entrepreneurs. So saying we’re all going to think alike is not going to happen,” said Jan Jones, a lobbyist for Caesars Entertainment, likely the most active of the Nevada casinos angling for an Internet poker bill. “It’s big personalities, big thinkers. Harnessing this into one cohesive mind is a near impossibility.”

It has been especially hard over the past two years, as the casino industry has contended with a march of dramatic and jarring events. In the spring of 2011, online poker outfits Full Tilt, Absolute Poker and PokerStars were charged in federal court, sending lawmakers scrambling to divest themselves of any associations with those companies or their affiliates, and casting a pall over the issue of online poker in general.

Then, at the end of 2011, a new reading of the 1961 Wire Act from the Justice Department set states racing to approve their own, in-state online lotteries, significantly upping the pressure on the pro-poker lobby to push their issue through the federal process or miss their chance entirely.

Shortly after that, influential Republican donor Sheldon Adelson declared himself opposed to legalizing online poker, giving Republican lawmakers an opportunity to distance themselves from the issue, and exposing conflicts in the casino industry to the country at large.

“I don’t think everyone’s working in lockstep toward the same goal,” Jones added. “But I think the AGA has done a very good job of trying to keep their members informed and moving along a path.”

The AGA’s members reject the suggestion that the efforts — either in messaging or emphasis — were anything less than satisfactory.

Instead, lobbyists pointed an accusing finger back toward Congress as a whole and the body’s well-documented inability, these past two years, to get much legislation accomplished.

Click to enlarge photo

Las Vegas-based casino companies such as MGM Resorts International and Caesars Entertainment are pushing for federal legislative regulating online poker.

“I think this is sort of typical of politicians: It’s never Congress’ fault that they didn’t get their act together; there’s always some other reason,” said Alan Feldman, spokesman for MGM Resorts International, a member of the AGA. “If you’re a Democrat, it’s the Republicans’ fault; if you’re a Republican, it’s the Democrats’ fault; and if you’re trying to toe the line with both, it’s someone else’s fault. If someone wants to use that as an excuse for why this won’t happen, fine, but it doesn’t change the fact there’s clearly a need for federal action.”

“There have been some very good lobbyists who have been retained by the companies on this — but it’s like, you could have the best yachtsman in the world sailing into a headwind and he’d have difficulty navigating,” said Mike Sloan, a lobbyist with Fertitta Entertainment, which owns Station Casinos. It is not a member of the AGA. “Nothing is getting done, and that’s where we are.”

Lobbyists point out that lawmakers never actually developed a bill they felt they could peddle around.

Reid and Sen. Jon Kyl, R-Ariz., were sharing a draft of a poker bill with Sen. Dean Heller as early as last summer. But Kyl insisted the draft not be shared outside of the small group.

Since September, however, the text of that draft has been public. Reid, Kyl and Heller have all expressed confidence that the legislation is adequate to both walk back the 2011 Wire Act reading and address concerns about the security of Internet poker. In public, they continue to maintain it’s only a draft.

“I don’t know where things stand as far as a final piece of legislation. Within the last few weeks was the first time that any type of actual language on a bill had ever really surfaced,” said Whittaker Askew, a lobbyist with the AGA. “Being out there talking about the issue without a tangible product, which up until the last few weeks has been the case, that makes it a little more of a challenge.”

Because of that, Askew said, the AGA focused its efforts on educating lawmakers about poker instead of aggressively whipping up votes.

“It’s important for us to have spent a lot of time giving background, educating members and their staff,” Askew said. “We’ve been focused on this education effort for the last 18 to 20 months. So this is certainly nothing new, but it is certainly a big effort.”

Still, that effort has been mostly behind the scenes. Askew detailed the public outreach part of the AGA’s work as essentially boiling down to a few press releases and two videos intended for social media: one produced in 2011 and one produced in 2012.

Lobbyists say public perception of their efforts doesn’t really matter.

“Just because it flares up in the press, doesn’t mean there hasn’t been a consistent effort,” Jones said. “If you’re really working a legislative process ... you cannot let that define the path that you’re on.”

However, every casino has its own style.

“I don’t think there is really a dime’s worth of difference between our position and those of most of our colleagues,” Sloan said. “The difference may be in effort.”

Not every company that supports online poker appears to be putting equal skin in the game.

Companies like Caesars have been a visible force working with lawmakers to advance a poker bill on Capitol Hill: Over the past two years, the company spent an industry-leading $5.8 million lobbying Congress on Internet poker and other issues, according to a compilation by opensecrets.org.

But companies like Wynn Resorts — which isn’t opposed to online poker — have spent a total of $315,000 on lobbying. Many involved in the online poker effort said Wynn’s lobbyists really haven’t been very actively involved in the discussions on Capitol Hill.

A spokeswoman for Wynn Las Vegas did not return a call for comment.

Meanwhile, companies like MGM, which has spent about $1.1 million on lobbying over the past two years, are somewhere in the middle.

Whatever the discrepancies in the industry’s lobbying efforts, all Nevada casinos are likely to profit from the bill if it passes because the legislation favors casinos with a proven track record of running responsible gaming operations for the first federal online poker licenses.

That gives them at least as much incentive to break through the congressional gridlock as Nevada’s representatives.

“It’s up to the industry to make the case, and it’s up to legislatures to understand the consequences of not moving the legislation,” Jones said. “I can’t blame this on Congress or on the industry. It’s just a function of time and timing. It just is. If you don’t find it this time, you just keep working after it.”

And though opportunities are diminishing, the industry is refusing to admit defeat.

“We absolutely believe this is good policy. And that’s not going to change whether we have 20 different opportunities that don’t get passed,” said Larry Epstein, vice president of government relations for Ultimate Fighting Championship, which has been working with Fertitta Entertainment to advance online poker legislation in Congress. “It’s frustrating that nothing’s happened, but in my view, I don’t think it compromises the potential of passage.”

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  1. Well, it is a good thing this bill will fail because it is NOT an online poker bill...it is a bill to kill the online gambling business so that the big Nevada gaming companies can continue their campaign against any improvements in the US online gambling environment unless the Nevada gaming companies can get a substantive monopoly over it.

    Online gaming/gambling can provide great expansions in jobs and economic development for US workers and companies and it is sad that we are still allowing the K-Street lobbyists in DC to destroy opportunities for Americans to get jobs, for American companies to make profits, and for our state and federal governments to generate reasonable tax revenues from those businesses.

    And this is because the big Nevada gaming companies either still do not understand online gaming (they think it is their casino gaming moved online --WRONG) or they are deliberately trying to destroy US opportunities so that foreign competition gets most of the new business development in this area...maybe that is why they are buying and partnering with foreign companies rather than supporting US business development.

    The online gaming business is good example of how corrupt politicians care more about their personal wealth than about the welfare of their constituents... Just shameful

    The fact is that if the Nevada gaming companies managed this correctly, they could grow and expand their businesses substantively; instead they stupidly worry about cannibalizing their current businesses --- just so misguided it is hard to understand how managements like that can continue to get their shareholders to support them while they actively destroy shareholder value and equity.

  2. Reid is the MAJORITY LEADER!!! He's the boss. He can get it done! It's always someone else's fault!!! He can't do anything for this state. We need him OUT and we need to put a rookie in there, who can actually get something done!

  3. Without getting into details, Longtimevegan has said with conviction, "any federal online poker approval would not pass." Said it once, say it twice, said many, many times. The votes are not there! The support is not there! What part of "No" do you not understand!

    And now, the poker advocates are trying to blame Harry Reid and Dean Heller, or anyone else on Capital Hill.

    Look, the reality, passing federal online poker legislation started out at 50/50. The odds are now 90/10 against. Why is it the poker advocates cannot see this reality? Anyone with relevant information know this is fact, and has been fact for the past 2-years.

    The best online poker can do is push States that have legalized gaming to approval measures for intrastate online poker. The Federal level is dead! Not in our life-time will there be Federal approval for online poker. And when the Feds do decide to approve online poker at the Federal level, this will the camel noses into the tent to oversight "all" gaming at the Federal level.

    With all the smarts guys running US gaming operation, why can't they see the big picture? What happened to the smart, quite, getting things done, seeing the big picture gaming executives that once dominated the Las Vegas strip and beyond? Or were there every smart guys at all?

    A good domino player always says, "all money is not good money." Why score ten points this round when you can force your opponent to play double-six, then you score 25 the next round instead.

    In addition... in addition, people like Sheldon Adelson and Steve Wynn (which are great for Las Vegas) have made lawmakers think twice about expanding any type of power to gaming operators or gaming owners based on their open involvement in the last Presidential Election. This is a deal breaker even in the eyes of a two-year old.

    You know, there is a different reality coming from people who have huge sums of money and go out to get something that is driven by personal motivation. And then there are people with authority, with power to help these different reality folks in this alternate universe, and they too, are in a different reality. This goes beyond being in the Bubble. This online poker deal show there are some people still in the moment of reality. You know, like 2 + 2 = 4, and not 3, as some people would like it to be.

    Federal approval for online poker is dead, for that fact, it never was alive at the federal level. Reality is reality my friends, let get back to it!

  4. The American Gaming Association help put online gambling to rest for a short period of time. The AGA has been spouting the same old myths and retoric for the past fifteen years. It's time for the AGA to sing a different tune.

    A new approach to online gambling will appear in 2013 - the next time it will be well thought out. Las Vegas casino owners never give upwithout a fight. They are the masters of planning for new revenue.

  5. Approval of Online Poker at the Federal level will restrict the expansion of domestic gaming...period!

    Online poker is an intrastate operation. Anything approved at the Federal level will be controlled at the Federal level.

    Be careful of what you wish for. This is a no brainer . But if your chasing the money the poker advocates are dangling like carrot to horse, you'll walk off the cliff without knowing it.

    Casinos are not masters at planning for new revenues. In this case, they are preparing the end for limiting domestic gaming and giving away control. State gaming provides the approval and the control for the casino industry. This is the partnership that allows legalize gaming to thrive in the USA. A workable and reasonable partnership. Any type of Federal intervention will interrupt this partnership. Federally approved online poker will bring about an intervention of this partnership.

  6. I said it before and I will say it again - Las Vegas casino owners are the masters at planning for new revenue. They sit in their ivory tower and watch gamblers on the computer screens part with their money and they plan new ways to get more money from the gamblers everyday.

  7. Sorry to burst your Bubble Theresa, that's not what they do. If you only knew.