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November 1, 2014

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Budget bill might be final option in fading effort to legalize online poker

The fate of a proposed legalization of online poker is a quiet ongoing debate on Capitol Hill, but since it’s sparking full-throated passions around Nevada, we thought it would be a good idea to parse through exactly what’s going on.

The measure in question is draft legislation from Senate Majority Leader Harry Reid, which would change the 2006 Unlawful Internet Gambling Enforcement Act to legalize playing poker — and poker alone — online.

The measure is expected to generate billions of dollars in revenue for states that license operators, such as Nevada and New Jersey, and give the federal government a cut as well.

Lobbyists for the bill were hoping to attach it to the Obama-designed tax extension bill currently being debated in the Senate and being decried by House Democrats. But that avenue was closed as Republicans and Democrats hashed out tax bill details last week, and without an amendment process, the poker measure doesn't appear to have a way forward.

“There’s virtually no discussion on this,” said Senator Max Baucus, the Democrats’ lead voice on tax legislation and chairman of the Finance committee, Monday.

The reason that this eleventh-hour push has become so crazed so quickly, is that all interested parties are watching the calendar: They only have 21 days left.

On Jan. 5, 2011, the new Congress gets sworn in, and the House comes under Republican rule for the next two years, rendering any measure to legalize online poker from that point forward effectively dead on arrival.

The bid to legalize Internet poker has several moral and political enemies among the rising chairmen in the House. Those who will control the committees with jurisdiction over the bill — Lamar Smith on Judiciary, Spencer Bachus on Financial Services, and Dave Camp on Ways and Means — have already made their vehement opposition known in a letter sent to Senate leaders, urging them to drop any discussions about gambling online.

With no guarantee that Democrats will be able to make up their losses in the House in 2012 — or even keep hold of their slim majority in the Senate — the stakes are clear: lawmakers have to do something immediately, or the industry can kiss their Internet dreams goodbye, potentially for a long while.

But without a viable vehicle, moving this legislation is not easy. “At this point, the only vehicle I see is the omnibus,” Senator John Ensign suggested Monday, referring to the federal budget bill that the Senate has yet to pass; because the gambling legalization measure is a revenue-generator, it could be attached to the federal budget.

With 10 days until Christmas and a pending schedule that still includes taxes, a budget, ratification of the Strategic Arms Reduction Treaty (or START), repeal of the military’s Don’t Ask, Don’t Tell policy against gays serving openly in the military, the DREAM Act, and approval of federal judges, it’s no surprise, though, that online poker isn’t high on the legislative agenda of most lawmakers.

In fact, it’s fair to say the push is probably only still on the table at all because of Senate Majority Leader Harry Reid. That said however, Reid has not been alone in pushing for consideration of this issue.

Reid has been getting a behind-the-scenes helping hand from Ensign, who’s been involved in discussions with leaders of his own party, as well as major casino lobbyists, such as Harrah’s.

“I’ve been very involved,” he said.

Still, this bill is not an issue to which Ensign — or Reid — has been willing to go to the pulpit on.

Part of that is because it’s unpopular among Republicans.

Supporters of the legislation say they’ve been hopeful that they could win the support of the Republican leader in the Senate, Mitch McConnell, by expanding the legalization to include not just poker, but also horse racing — a huge cash industry in his home state of Kentucky — and at least get a no harm/no foul pass from Arizona Sen. Jon Kyl, who opposes the measure and came out last week to say there was “zero chance” of it getting onto the tax bill.

But part of that is also strategy.

“The real threat to the bill is press coverage,” a source in the gaming lobby said last week. “The hope was it would be done with the least amount of publicity possible.”

That strategy got upended last week, when Reid told the Sun that while senators were still working on the bill, they wouldn’t be able to get it onto the lame duck agenda. “We’re still working on it; we’re not able to,” he said.

His staff recanted a few hours later, saying Reid was instead answering a question about House procedure in the second half of his answer — though a tape of the episode indicated the procedure question was not posed to him until after he completed his answer.

Regardless, Reid’s office says efforts are still under way to press for the legislation, and has since been trying to eke out some sort of saving grace for the measure.

The gaming industry has historically been one of Reid’s largest campaign donors, and in this year’s midterm elections, the heads of several casinos that stand to gain from this bill lent him their vocal support — and in the case of Harrah’s, lent hours of the workday to ensure that union voters, who tend to swing Democrat, would have time and transport to get to the polls on Election Day.

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