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Politico
© December 8, 2010
By Kenneth P. Vogel and Manu Raju
Senate Majority Leader Harry Reid is trying to use the tax cut package President Barack Obama brokered with Republicans to legalize online poker, POLITICO has learned — a move that could further complicate the deal Obama announced Monday.
Already, the online poker proposal has exposed the Nevada Democrat to charges of flip-flopping on a controversial issue, as well as using his Senate leadership position to repay big casino interests that helped him win reelection in a hard-fought campaign against Republican Sharron Angle last month.
Reid, who has previously opposed online gambling, declined to comment Monday through a spokesman.
But Sen. Orrin Hatch (R-Utah), as well as several senior congressional sources and gambling lobbyists, confirmed that Reid and his staff have reached out to other Senate offices to try to build support for adding the online poker legislation — a draft of which POLITICO has obtained — to a measure extending the Bush-era tax cuts.
"They're trying," said Hatch, who next year will become ranking Republican on the Senate Finance Committee, which has jurisdiction over parts of the gambling measure. "Sen. Reid would like to do that."
Republican leadership aides said the poker measure, which was drafted over the weekend at Reid’s request, wasn't part of the deal the GOP reached with the White House. But a senior congressional official with knowledge of the ongoing talks said Reid has privately discussed the measure with the two Republican senators representing their caucus in the negotiations — Senate Minority Leader Mitch McConnell of Kentucky and Sen. Jon Kyl of Arizona.
Kyl, a leading opponent of online gambling, told POLITICO he intends to block Reid’s proposal and vowed there is "zero chance — no chance whatsoever that would be part of the tax deal. I don’t think it would be the right thing to do.”
Meanwhile, Democratic lawmakers in both chambers have blasted the deal Obama reached with the GOP because it would extend tax relief for Americans earning more than $250,000 and reneges on Obama’s own campaign pledge to eliminate it. They warned that the White House has work to do to rally support within Obama's own party for the tax package itself, let alone if it included special-interest gambling legislation.
“The House Republicans will go crazy if this is in the bill,” said one senior congressional aide, declaring it “a total, 100 percent payback” for the support Reid received from gambling interests. The aide asserted that lobbyists for the Las Vegas-based casino operator Harrah's, now known as Caesars Entertainment Corp., even helped write the legislation.
“You could call him ‘Harrah Reid’ at this point,” the aide quipped.
The company, through its employees and political action committee, contributed $83,000 to Reid’s reelection campaign, making it his fourth most generous supporter, according to the nonpartisan Center for Responsive Politics. Another Vegas casino operator, MGM Resorts International, was Reid’s biggest donor, at $192,000.
The two casino companies combined to contribute at least $375,000 to Patriot Majority, an independent political group that spent more than $3.3 million attacking Angle, whose down-to-the-wire campaign against Reid was fueled with millions of dollars from tea party donors. Reid and Angle spent more than $41 million between them, making their Senate race the second-most-expensive contest, according to the Center for Responsive Politics.
In addition, e-mails obtained by the conservative National Review appear to show Harrah’s officials working to get their employees to the polls early for Reid. One official, apparently concerned about a lack of urgency, wrote, “Waking up to a defeat of Harry Reid Nov. 3 will be devastating for our industry’s future. I know everyone is working hard, but somehow the effort is not getting through the ranks.”
Caesars Entertainment, which owns the World Series of Poker franchise, has been among the most aggressive advocates for legalizing online gambling, which would require overturning a 2006 bill called the Unlawful Internet Gambling Enforcement Act. That law bars financial institutions from processing electronic payments for online gambling.
Jan Jones, Caesars Entertainment’s top lobbyist, pointed out in an e-mail that other casino interests also support legalization of online poker, adding that it would be inaccurate to describe Reid’s legislation as a sweetheart deal in exchange for the casino’s support during his reelection campaign.
“It has industry support ... and [is] not a payback,” Jones wrote. She declined to comment further, citing Securities and Exchange Commission regulations barring her from commenting about corporate matters during financial filing periods.
The National Indian Gaming Association is opposing Reid’s effort to insert the online poker language in any tax cut bill, said an official with the group, Jason Giles. He asserted it gives an advantage to Las Vegas-based gambling operators while discriminating against tribal operators.
“It is drafted to create an initial regulatory monopoly for Nevada and New Jersey for the first several years of the bill, which gives Las Vegas operators time to capture the market,” he said.
A gambling industry insider familiar with Reid's efforts said Republican-leaning Vegas casino moguls Steve Wynn and Sheldon Adelson, while generally supportive of Reid’s legislation, take issue with provisions that could allow companies that previously operated in violation of online gambling laws to cash in.
Frank Fahrenkopf Jr., president of the American Gaming Association, declined to comment, while a top spokesman for MGM Mirage said the company generally supports Reid’s effort.
“The final bill is still in process, and there may be any number of technical or language issues with which we might disagree,” said the spokesman, Alan Feldman, “but on the whole, this effort seems to us to be a comprehensive and appropriate balance between creating jobs and generating badly needed tax revenues for states and providing significant structure and rigor to the licensing and operations of online poker sites.”
This year, the House Financial Services Committee held hearings about online gambling and approved legislation to regulate it. But the prospects for passing legislation are expected to dim next year, when Republicans assume control of the House.
Last week, three House Republicans who will become committee chairmen with jurisdiction over online gambling legislation in the next Congress — Reps. Spencer Bachus of Alabama, Dave Camp of Michigan and Lamar Smith of Texas — penned a letter to Reid and McConnell “oppos[ing] any attempt to legalize Internet gambling during the lame-duck session.” They blasted as “secretive” and “undemocratic” any effort to attach such legislation to another bill.
"Congress should not take advantage of the young, the weak and the vulnerable in the name of new revenues to cover more government spending," they wrote.
Interesting article this morning.
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or does it. Ah hell, I'm just gonna go make a bowl of chocolate fudge frosting with no cake and then I'll feel allll better. 
It would be difficult but if that's what it takes to get some actual regulation in this industry than I guess it could be worth the wait. 
