Tuesday, Sept. 11, 2012 | 2 a.m.
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Ever since online poker legislation faltered and failed in late 2010, the prevailing wisdom has been that the road to successful passage leads though the Senate, via the collective efforts of Majority Leader Harry Reid and Republican Sens. Dean Heller and Jon Kyl.
But on Monday evening, Heller broke rank, informing Reid in a letter that "as discussed, it would be beneficial for the House of Representatives to first address this issue."
His direction might sound like a simple scheduling switcheroo. But for the controversial poker bill, it is a potentially devastating change with ramifications that could undermine the Nevada economy — and, top Democrats charge, a clear indication that Heller dropped the ball.
"Several months ago Sen. Reid asked Sen. Heller to secure Republican votes to help pass an Internet poker bill and to date, Sen. Heller has not been able to secure any support," said Reid spokeswoman Kristen Orthman. "Rather than standing to fight for this important issue for Nevada, Sen. Heller has decided to run for cover and attempt to lay blame on others."
Reid leaned on Heller and Kyl, of Arizona, to come up with 15 Republican senators, according to Democrats, to complement the approximately 45 Democrats Reid has lined up to vote in favor of legislation to legalize playing poker online. It takes 60 votes in the Senate to supersede the threat of a filibuster.
Heller indicated in his letter that he and Kyl had spoken with about half the Republicans in the Senate about supporting an Internet poker bill; he did not say how many, if any, had pledged their support.
But Heller did charge Reid with artificially pushing up the schedule to deliver votes for the bill — conceivably, to make him look bad before the November election, when Heller will face off against Reid's protégé, Rep. Shelley Berkley, to represent Nevada in the Senate.
"With over a dozen states already taking steps to legalize and expand Internet gambling, I recognize that we must act quickly," Heller wrote. "I am concerned with attempts to impose a deadline on a Friday afternoon during recess, providing little if any time to reconfirm the necessary support among my conference."
Democrats confirmed that Reid had given Heller until Monday evening to pony up the votes, though they argued he had had prior notice. The Senate has been out of session since early August until this week.
"It does seem like there's a little bit of political posturing going on," said one poker lobbyist with knowledge of the negotiations.
"At one point, there was collaboration between Reid and Heller, with Heller responsible for delivering at least three or four key votes on the Senate side," the lobbyist said. "That was the task that was laid out. This is an unexpected back-and-forth, and things seem to have gone a bit awry."
The lobbyist described Heller's idea of moving the epicenter of Internet poker legislation back to the House as "pretty nonsensical."
An Internet poker bill would not necessarily be dead on arrival in the House. There are many supporters of legalizing poker in the House, some of whom have even drafted bills on the subject.
But there are also several House members who strongly oppose online poker — many of whom hold leadership positions on the committees that would be concerned with legalizing the game. In fact, last summer, a group of online poker advocates — including Berkley — banded together around a bill redesigned to steer poker legislation through the House's Energy and Commerce Committee specifically so it could be handled by pro-poker Republican Rep. Joe Barton, instead of the anti-poker Republican representatives in charge of the Financial Services, Ways and Means and Judiciary committees.
If anything, Republicans in charge of the House seem more strongly committed now to oppose a poker bill. Late last month, the GOP approved a platform that included a pledge of support for "the prohibition of gambling over the Internet" and called for "a reversal of the Justice Department's decision distorting the formerly accepted meaning of the Wire Act that could open the door to Internet betting."
Heller's letter to Reid echoed the GOP's platform in part. He wrote that the Department of Justice's Dec. 23 reading of the Wire Act, making only sports betting illegal, was "the root" of the Internet gambling problem — and accused Reid of not doing enough in the Senate process to address it.
"If you think for some strategic reasoning that something should originate in the Senate," Heller wrote to Reid, "then it should address the root of the issue that is plaguing our gaming industry in Nevada, namely the Wire Act."
Since the Justice Department reversed its position on the Wire Act last year, states have rushed to legalize their own online gaming enterprises. Illinois has already adopted an Internet-based state lottery, and Nevada has already legalized intrastate online poker; 16 other states are considering legalizing online gaming in various forms.
In a void of congressional action, states adopting online gaming, most notably California, could give reason for tourists to stay home, decimating Nevada's gaming-based economy.
Reid's bill, which currently exists as legislative text but has not been finalized, has been updated since the Justice Department decision to make it clear, according to Democratic sources, that under the Wire Act, Internet gambling, save for poker, is not legal. It otherwise sticks to the same basic framework as the online poker bill that was up for offer two years ago: incorporating a focus on safety and curbing criminal activity, giving states a chance to opt-in to the system, and returning almost all the revenue collected by the federal government to the states.
"Kyl and Reid were talking about online poker before DOJ came out with anything," a Democratic aide pointed out.
Indeed, when online poker discussions between Reid and Kyl began two years ago, the antagonistic bit of law they were contending with was the Unlawful Internet Gambling Enforcement Act, a measure Kyl had helped shepherd through a Republican-led Congress in 2006 that outlawed financial transactions for all forms of gambling.
But today, Heller is absolving the Unlawful Internet Gambling Enforcement Act of any significance in the process, and singularly focusing all his blame on the current, Democratic administration and its 2011 Wire Act interpretation.
"UIGEA neither legalized nor made unlawful Internet gambling," Heller wrote.
"The core of the problem is the Department of Justice's interpretation of the Wire Act," added Heller's spokesman, Stewart Bybee. "Sen. Heller's focus is to pass a piece of legislation that fixes the Wire Act and also brings a component for regulating online poker."
While a political face-off over poker isn't surprising, it does compromise the chances of getting any legislation passed in the near future.
"I don't know if this is turning political because of the closeness of the Berkley race, but the ability to get something done prior to the election, I frankly don't see that happening," said a poker lobbyist. "There are very few legislative days in the calendar before the lame duck (session). I always thought, if something was going to happen, it was going to happen in the lame duck."
That raises the stakes for the final two months of the post-election calendar year. Both Reid and Heller have stated that it is critical that legislation legalizing online poker, and prohibiting all other forms of Internet gambling, pass by the end of the year in order to stem the random, state-by-state proliferation of online gambling laws and protect Nevada's interests in the gaming economy.
With that in mind, Reid is broadcasting a message to Heller: If he won't do his part, Reid is happy to press on without him.
"Sen. Reid is not going to abandon the fight," said Orthman, "and will continue to seek bipartisan support to legalize online poker that is important to Nevada."