Gamers face a tough agenda

WASHINGTON -- The gaming industry is keeping a close eye on Congress this year, and is monitoring issues ranging from the employee meal tax to immigration controls, its top federal lobbyist said Thursday.

The 106th Congress officially opened Wednesday and right out of the gate, one of gaming's chief opponents Rep. Frank R. Wolf, R-Va., immediately said he will offer legislation to end some forms of gambling cruises.

Wolf's announcement follows on the heels of a scathing attack on the gaming industry earlier this week by a federally appointed commissioner charged with investigating the social and economic impact of gaming.

James Dobson of the National Gambling Impact Study Commission (NGISC) released an eight page newsletter attacking the gaming industry, saying it "threatens the work ethic and the very foundation of the family."

"With the Dobson and Wolf people, we have always got to be on guard and look at things very carefully," said Frank J. Fahrenkopf, president and CEO of the American Gaming Association. "They are morally opposed to gaming and they want to have all gaming to cease."

Fahrenkopf will visit Las Vegas next Tuesday and Wednesday to provide a congressional update of gaming-related issues at the American Gaming, Lodging Leisure Summit. Fahrenkopf said he is proud that there was no anti-gaming legislation passed in the 105th Congress, but he said the NGISC report could provide some ammunition for opponents to try and push anti-gaming legislation.

"We expect the anti-gaming movement will look at the study and disregard anything positive that is said and will look for the negatives that may be there," he said. "They will attempt to use that as a hook for legislation."

Fahrenkopf said he thinks the report will highlight the positives gaming has brought to communities such as economic development and job creation. But he also concedes the report will touch upon problem gamblers and the need to provide more money for treatment and research.

An overview of some of the issues affecting the gaming industry this year:

Bankruptcy reform. Rep. Jerrold Nadler, D-N.Y., tried to include a stipulation in the House bankruptcy bill last year that would have stopped creditor claims for debts assumed while in or near a gaming establishment, or if the creditor knew the money was going to be used for wagering. While Nadler's amendment was defeated and bankruptcy reform stalled, the New York Democrat might possibly bring it up this year.

Immigrants. The AGA is working with airlines and tourism businesses to prevent new immigration reform legislation -- designed to track foreign visitors -- from fully being implemented. Fahrenkopf said the AGA supports keeping illegal aliens from entering the country, but the immigration legislation would make it more difficult for legitimate foreign visitors to enter the United States. Las Vegas, in particular, might face problems if the legislation is implemented and foreign high-rollers don't come to gamble.

Online gambling. The AGA is still lobbying against Internet gambling because the unregulated cyber industry could bring harm to the traditional casinos by sullying their reputations.

Smoking. Gaming lobbyists will work hard to prevent legislation banning smoking in casinos.

--Indian gaming. While the AGA takes a neutral stance on Indian gaming -- some AGA members have partnered with Indian casinos -- the future of Indian gaming regulation is important. Fahrenkopf promised to follow any movement on Indian gaming regulations.

Currency transactions. The House passed money laundering legislation last year, but it stalled in the Senate. The legislation was designed for financial institutions such as banks but included casino. It could harm casinos by hurting customer relations, Fahrenkopf said. Also, if the legislation becomes law, it will open the door for other intrusive regulations to be imposed upon casinos, he said.

Income tax deductions. The AGA is closely monitoring an idea championed by former Sen. Dan Coats, R-Ind., who wanted to stop people from offsetting their gambling winnings with losses on their taxes. The AGA is concerned federal lawmakers in search of revenue for a pet project will try to generate more cash flow by targeting this tax provision. Although it was defeated last year -- Coats withdrew his idea before a vote took place -- the AGA is concerned this could be a common occurrence.

Meals tax. One of the biggest federal-related gaming issues last fall concerned the employee meal tax. After members of the Nevada congressional delegation were able to pass legislation protecting employee meals from taxes and preserving industry tax deductions for the meals, the Internal Revenue Service read the new regulations to its favor and imposed unfavorable guidelines, the AGA says. A strong show of congressional bipartisan support urged the IRS to hold back on implementing the guidelines and the AGA is offering its own proposal. A decision is expected by spring.

"It is a big issue," Fahrenkopf said. "Across the board it probably has more negative impact on employees than it does on the companies."

Wolf's bill on casino cruises is not a good indication for the industry, said Wayne Mehl, the Washington lobbyist for the Nevada Resort Association, which represents the state's major casino resorts.

"I think it indicates a long, tough session for the industry," Mehl said.

Mehl is also worried about the bankruptcy bill. Nadler has said he wants to protect addicted gamblers from easy access to credit cards and ATM machines while they are gambling.

Mehl said making it harder for gamblers to use credit cards and ATM machines "would mean less money available for casino gambling and less convenience for the customers."

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