It’s interesting and telling how the responses to Congressman Peter King’s online gambling bill (H.R. 2282) so closely mirror those of all the failed attempts at federal regulation in the past: Advocates outside the commercial casino establishment are enthusiastic; they’re guarded and non-committal within; and the public lotteries and the Indian tribes and the leaders of the states where they reside are as ever skeptical and resistant.
In a broad sense these are views that speak to the historic fault lines riddling U.S. gambling policy that no regulatory scheme out of Washington, except in regard to sports betting, has been able to repair or surmount. Weigh in the near-total absence of any political capital to be gained with that to be lost from appearing to endorse Internet gambling as a matter of national policy, which is what regulation implies, and Mr. King’s bill is not expected to fare any better.
“I don’t see anything happening,” said Nevada’s Harry Reid, who heads the slender Democratic majority in the U.S. Senate and has all but given up on the possibility that either his chamber or the Republican-controlled House of Representatives will get behind the poker-only legislation he favors, let alone a bill like King’s that legalizes casino games as well.
It’s reported that for the sake of a poker bill aimed at salvaging a nationwide player pool for his Las Vegas casino constituency Reid is trying to mend fences with the Republican opposition. But he knows the votes don’t exist and has said as much. A poker-only bill his staff had crafted last year in partnership with GOP Senator Jon Kyl, who has since retired, was bungled over election politics. Not that it had any chance, given language in it that sought to lock up regulatory primacy for Nevada and freeze out the lotteries, and it never made it to the Senate chambers.
The American Gaming Association, the Washington lobbying arm of those same Las Vegas companies and the most vocal advocates of a poker-only industry, also knows the votes aren’t there, and the legislation tossed into the void by King, a New York Republican, on which Reid was not consulted and which appears to have caught him unawares, has sparked a war of words between the senator and the AGA’s president, Republican heavyweight Frank Fahrenkopf.
Nevada lobbyist Jon Porter, a Republican who served three terms in Congress representing parts of Las Vegas and the surrounding area, blames divisions among the various stakeholders in the debate and says casinos need to work with the lotteries and the Indian tribes and not against them.
“Those are some powerful groups,” he noted at a recent industry conference in Las Vegas.
The King bill (H.R. 2282), introduced in the House on 6 June 2013 as the ‘‘Internet Gambling Regulation, Enforcement, and Consumer Protection Act of 2013” (a title borrowed from former Congressman Barney Frank’s failed crusade of the last decade), attempts to address some of these issues by providing for licensing for all providers, including lotteries, the tribes and online race-betting, under the auspices of an Office of Internet Gambling Oversight within the U.S. Treasury Department.
The AGA hadn’t taken a formal position on H.R. 2282, at the time of writing this article. The bill’s endorsement of casino-style games is a concern.
The states, led by the National Governors Association, actively opposed Reid-Kyl, and it’s expected they will work with same energy against the King bill and anything like it that comes down out of Washington.
“We believe the federal government should be respectful of states’ rights to regulate online gaming,” said a spokesman for the National Conference of State Legislators, “and we see these bills as an affront to states’ sovereignty.”
This appears to be the position of the Obama administration as well. Certainly it was implied by a December 2011 memorandum from the Justice Department clarifying the legality of state lotteries operating online.
Reid believes that with individual states actively pursuing such licensing and laying the groundwork for networking agreements with other states and with foreign operators, the prospects for the federal government to take control of nationwide market that is estimated to be worth US$7 billion – $10 billion over the next five years.
“I felt online poker would be good for the state of Nevada,” said Reid, who recently expressed the belief in an interview with the Las Vegas Review-Journal that a “golden opportunity” was missed.
Porter, on the other hand, remains optimistic about something happening at the federal level. “It will come back this session. It won’t be a stand-alone bill. It will be attached to something else.”
H.R. 2282 has been referred to three committees: Financial Services, Judiciary and Energy and Commerce. No action had been scheduled on it, as of this writing. Congress recesses on 2 August and returns 9 September. It will meet for 39 days after that. The session ends 13 December.