U.S. Political Business

Published: Saturday, March 31, 2007 Online-Casinos.com

POLITICAL BUSINESS

Getting U.S. politicians on your side can be an expensive business.....

Online and more traditional land gambling interests spend millions of dollars every year on lobbying activities in the USA, claims the newspaper USA Today in an article which appeared this week on political liaison aimed at persuading politicians to see things your way.

Sources for this financial bonanza include online gambling companies, land casino firms, Indian tribes and horse racing collectives among others, and the newspaper predicts that firms specialising in this lucrative field of federal and state political influence will again invest many millions in it this year.

The $25 million it is officially recognised the gaming industry as a whole spent on lobbying in 2006 was a slight increase over the previous year's total, but down from the $28.5 million spent four years ago. Overall, companies, associations and other groups spent $2.5 billion on lobbying in Washington last year, with the pharmaceutical industry topping the charts at $166.5 million.

The spending came amid controversy over public corruption scandals involving convicted former lobbyist Jack Abramoff, who admitted to bilking wealthy American Indian gambling casino tribes.

"Even though we didn't have anything to do with it, we all tend to get labeled," said Frank Fahrenkopf Jr., president of the American Gaming Association, which spent $900 000 last year lobbying on behalf of commercial land casino interests.

Still, the gambling industry fared pretty well in Washington, he said. And he expects casinos will do even better this year because of a new cast of leaders in Congress who understand the industry.

They include Senate Majority Leader Harry Reid, a Nevada Democrat who has been a strong land casino advocate; Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee; and Rep. John Conyers, D-Mich., the House Judiciary Committee chairman.

The industry also has Republican allies in powerful posts, including Sen. John Ensign, a Nevada Republican, who now heads the National Republican Senatorial Campaign Committee.

Much of the [land] gambling industry's 2006 lobbying centered on legislation to ban online betting. The measure became law after former Senate Majority Leader Bill Frist attached it to an unrelated 'must-pass' security bill passed late at night last year as Congress was about to recess for mid-term elections.

Internet gambling supporters want lawmakers to reverse the ban, or at least ensure that a proper investigation into the regulation of online gambling is started before some of the regulations go into effect this summer.

The article highlights the Poker Players' Alliance, which lobbied heavily against the ban and recently hired former New York senator and poker enthusiast Alfonse D'Amato to lead the group's effort this year. D'Amato's message to former colleagues: the U.S. government could generate $3 billion in taxes a year if it regulated the industry.

"There are millions of Americans who love poker and who feel strongly their rights were taken away in the last session," said Michael Bolcerek, president of the Poker Players Alliance, which paid another lobbying firm $540 000 last year to work against the bill. "It's an overreach of the federal government that needs to be rectified."

USA Today also covers more recent developments involving the attempted repeal of the UIGEA by Rep. Barney Frank, chairman of the House Financial Services Committee, who told The Financial Times recently that the Internet gambling ban was one of the "stupidest" bills ever passed.

"Meanwhile, two Nevada lawmakers, Reps. Shelley Berkley, a Democrat, and Jon Porter, a Republican, are drafting a proposal to study ways to regulate online gambling," the article continues. "But gaming experts question whether the issue will gain any traction."

"It's a subject the public cares somewhat about," said Robin Hanson, an economics professor at George Mason University who studies the gambling industry. "But they're not overwhelmingly passionate about it."

Hanson says it's usually more difficult for Congress to repeal anti-gambling measures than to pass them because it's the kind of issue most politicians don't want to promote. "Usually, the way gambling grows is by neglect," he said.

Although efforts to ban off-reservation Indian casino gambling died in Congress, the Interior Department is considering regulations that could restrict development of new Indian casinos on off-reservation sites. Dozens of tribes who want to build casinos - in some cases hundreds of miles from their reservations - are lobbying against the rules. But many wealthy gaming tribes support new regulations, saying the practice has led to "reservation shopping."

Tribal governments are also monitoring the actions of the National Indian Gaming Commission, which wants to make bingo machines used in certain Indian casinos work slower so they won't resemble Las Vegas-style slot machines.

Despite the high-stakes measures affecting Indian casinos that Congress considered last year, the $16 million that tribes spent on lobbying was about 25 percent less than they spent in 2003, according to the Center for Responsive Politics. Experts attribute the drop-off to the Abramoff scandal.

"Since the Abramoff scandal, they have taken more care in selecting lobbyists to represent them," said Roger Gros, editor of the magazine Global Gaming Business. "They're much more selective on where they spend their money."

Disappointingly, the article did not touch on the notorious "exceptions" or "carve-outs" which characterise U.S. political attempts to ban online gambling. These have been a frequent element in lobbying initiatives by the horse racing, state lotteries and fantasy sports sector, where offline entities frequently have protectionist agendas and seek to reserve online gambling opportunities to themselves and have the lobbying will and wherewithal to pursue the advantage through influencing US politicians.