Politics

11.20.13

Sheldon Adelson’s Republican Roulette: Can Online Gambling Be Banned?

Casino mogul Sheldon Adelson sank $150 million into GOP efforts in 2012, but his new uphill battle to ban Internet gambling pits him against many Republicans—including Chris Christie.

GOP mega-donor Sheldon Adelson was one of the biggest players in the 2012 Republican primary, bankrolling much of Newt Gingrich’s presidential bid, giving Mitt Romney’s PAC $20 million, and eventually donating nearly $150 million to GOP candidates and causes. But Adelson’s newest lobbying effort to ban Internet gambling puts him at odds with at least four Republicans with 2016 presidential aspirations and threatens to supercharge the GOP family feud with all the drama of a high stakes poker match.

According to a report in The Washington Post, Adelson is planning a multi-front war to stop online betting, which is now legal in Nevada and Delaware, and will begin in New Jersey next week. In January, Adelson reportedly will launch the Coalition to Stop Internet Gambling, a public campaign to convince Congress and states to ban all forms of online gaming.

“What Mr. Adelson is trying to do is cut off progress at the state level by enacting a federal prohibition,” says John Pappas, executive director of the Poker Players Alliance in Washington. Pappas says Adelson likely faces an uphill battle to get Congress to move on Internet gaming legislation after years of inaction. “But we certainly aren’t discounting this effort. Sheldon is very influential, powerful, and has the resources to push this very hard.”

Adelson’s resources are estimated to be more than $20 billion, derived largely from the casinos he operates in Las Vegas and Macao. But Adelson says the gambling that happens in full view in his casinos quickly becomes dangerous, especially for children, when the games move out of sight and to the Internet. In an op-ed in Forbes magazine, Adelson called the ability to place bets online “a toxin,” “fool’s gold,” and “a societal train wreck waiting to happen.” At least a dozen more states will consider adopting online gaming next year.

When Adelson takes his case to state houses and Capitol Hill, he’ll certainly find support in religious conservative circles and among a select group of conservative legislators, including Reps. Frank Wolf (R-VA) and Bob Goodlatte (R-VA), the chairman of the House Judiciary Committee, who have long opposed Internet gaming.

But Adelson also can expect a buzz saw of opposition from some of the fastest-rising leaders in the GOP, including superstar governors Chris Christie in New Jersey and Brian Sandoval in Nevada. Both men are much discussed as potential presidential material and signed laws legalizing Internet gambling in their states as a way to pump revenue and jobs into struggling resorts.

The rush to embrace online gaming at the state level began at the end of 2011, when the Justice Department reversed a decades-old prohibition in the Wire Act, which passed in the 1960s to regulate sports bets placed over the phone.

Within days of the DoJ decision, states were writing their own bills to help local casinos capture the revenue they said has been going offshore for years. Christie signed the New Jersey bill in February after twice vetoing legislation he said was unconstitutional, lacked taxing authority, or fell short of safeguards. But when he signed the bill this year, he called Internet gambling “a responsible yet exciting option that will make Atlantic City more competitive while also bringing financial benefits to New Jersey as a whole.”

Seeking to beat New Jersey to the punch, Sandoval called an emergency session of his state’s legislature days before New Jersey passed its bill, to green light online gaming in Nevada. Sandoval, who was once the head of the Nevada Gaming Commission, called the online poker bill “critical to our state’s economy” and said it “ensures that we will continue to be the gold standard for gaming regulation.”

“The Internet cannot be forced back into the bottle—nor can market demand.”

Republican support for online gaming also extends to Capitol Hill, where rumored White House hopeful Rep. Peter King (R-NY) has introduced legislation to legalize online gaming at the federal level, and other potential GOP White House suitors, such as Donald Trump, who has called Internet gaming the future of the industry. Trump still owns a stake in two Atlantic City casinos that have been approved for online wagering starting next week.

While Adelson’s move to launch a public coalition will pit him against many in his party, he is already fighting most of the leaders in his own industry by pushing to ban a source of revenue that most casinos say they need to survive. The American Gaming Association, which supports a bill to make online poker legal at the federal level, argues that online gaming already exists through illegal offshore operations that are unregulated and untaxed, and pulling millions of American dollars offshore. “The Internet cannot be forced back into the bottle—nor can market demand,” said Geoff Freeman, AGA president and CEO.

It is impossible to predict how Adelson’s move to stop Internet gaming will play out in Washington and around the country, especially with so many Republican forces moving in the other direction, along with Senate Majority Leader Harry Reid (D-NV), who has been supportive of at least partial legalization of online gaming.

But with Adelson ++on the record saying he plans to spend more than $300 million in the future  on the political candidates and causes he believes in, nobody on Capitol Hill involved in the online gambling battle is ready,