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Adelson's Online Gambling Ban Losing Political Steam

It was a bad week for Sheldon Adelson. The billionaire casino owner has said he’ll spend whatever it takes to stop the spread of legal online gambling in the U.S. To that end, his lobbyists authored a bill, the Restoration of America’s Wire Act (RAWA), which would do just that; rewriting a 53-year-old law to create a de facto national ban on all Internet gambling. For a while, it seemed his measure was making headway; the bills had picked up cosponsors—18 for the House Bill 4301 and four for the Senate Bill 2159—and was set for a hearing in the House Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations sometime in early December. This week, however, the prospects for Adelson’s bill dimmed significantly as leaders in the conservative and free market movements began to speak out against the measure.

On November 17, former congressman Ron Paul (R-Tex.) published a scathing opinion piece denouncing the effort to federally ban internet gambling as an example of “crony capitalism” intended to benefit one person, Sheldon Adelson, who is “using his political influence to turn his online competitors into criminals.”

That same day, the Poker Players Alliance tweeted that their sources had revealed the planned hearing on RAWA had been scuttled and that the subcommittee would not take up the issue this year.

A few days later 12 influential conservative and libertarian groups, including CEI, Americans for Tax Reform, and the American Conservative Union, sent a letter to the leaders of the House and Senate calling RAWA an “assault on our Federalist system” and urging them to oppose the attempt to take away states’ ability to regulate gambling activities within their borders.

All of this does not mean that Adelson has lost the war, however. As The Washington Post reported, rumors are swirling that current Senate Majority Leader Sen. Harry Reid (D-Nev.) and House Speaker John Boehner (R-Ohio) are hatching some kind of deal to push RAWA through during the lame duck session, possibly by attaching it to another must-pass measure—such as an omnibus spending bill to avoid a government shutdown; a tactic that was used successfully in 2006 to enact the Unlawful Internet Gambling Enforcement Act (UIGEA), which created prohibitions on the processing of financial transactions related to unlawful internet gambling.

Additionally, Neil McCabe writing for Townhall.com noted that House GOP leaders “reached out to Reid to see if he wanted to make RAWA part of a massive clearing of the decks bill, full of all the tax break extensions and other goodies that never made it out of this session.” In an interview with Jon Ralston, Andy Abboud—Adelson’s right hand man—hinted that such a plan was a done deal and the “cake is baked”.

Politically, it’s hard to imagine that Boehner could get away with pushing a bill through that so obviously violates the principle of federalism. It’s even less likely that Reid could get away with doing such a big favor for Adelson who is certainly no friend to his party and arguably responsible, at least in part, for the midterm defeats of notable Democrats. Adelson reportedly gave $5 million to the Congressional Leadership Fund and “at least” $20 million to other groups, including Americans for Prosperity and Crossroads GPS, which poured money into successful campaigns against Sen. Mark Udall (D-Colo.), Sen. Mark Begich (D-Alaska), Sen. Kay Hagan (D-N.C.), and Mary Landrieu (D-La.), who is likely going to lose in a runoff election.

Furthermore, it’s not just conservative and free market think tanks opposing the ban. Along with National Governors Association, the National Conference of State Legislatures, and the Fraternal Order of Police are coming out against a federal Internet gambling ban, and several of Reid’s top campaign contributors, including MGM, Caesars, Boyd Gaming are spending big and lobbying hard against Adelson’s bill.

Despite all of the political odds against Adelson’s bill, the specter of UIGEA looms for those of us paying attention to the issue in 2006. We will just have to keep a close eye on any bill that manages to make it out of both chambers of Congress.