Reid Says No Hope for Internet Poker in 2012

But reforming online gaming laws a frontburner item for 2013

by , Dec 20, 2012 | 1:00 pm

WASHINGTON – Its dim prospects finally fading to black, Sen. Harry Reid pulled the plug [last] Friday on the effort in Congress to legalize Internet poker this year.

With only days remaining in the session, and with consensus far from reached on a bill that sought to reshape the landscape of online gaming, “we have simply run out of time in this legislative calendar,” he said.

“I am disappointed,” Reid said, adding he and Sen. Dean Heller, R-Nev., “remain committed to this issue and it will be a priority for us in the new Congress.”

Reid’s comment in a statement came shortly after his chief of staff, David Krone, said in an interview that “this bill for this year is dead.”

The poker bill was a priority for several Nevada casino companies seeking a lucrative new and national market for their brands and for poker players seeking legal and federally regulated online games accompanied by consumer protections.

But it drew spirited opposition in states considering badly needed revenue through running their own online games, from some Indian tribes and from vendors that want to diversify state lottery offerings online, an expansion which would have been declared illegal under a Reid bill that was being written with Sen. Jon Kyl, R-Ariz.

“It’s just, reality hit us in the face,” Krone said. “It’s a tough bill to educate people on, and people just weren’t ready.”

Reid’s struggles to find a path for poker were apparent through the year and more so after a bill draft was leaked in September. It triggered fresh opposition from lotteries, the National Governors Association and church groups.

While legalizing online poker, the bill would have declared most other forms of Internet gambling illegal, reversing a Department of Justice memorandum from a year ago that gave the green light to legislation being proposed in more than a dozen states to initiate in-state online gambling.

The Reid-Kyl bill never was formally introduced, which only added to the difficulty of selling it to senators.

Adding to the challenge, Krone said, the gaming industry was unprepared to help defend the bill when opposition grew and coalesced. He said, companies could not agree on a public relations plan that could have pushed back.

“I do think there’s a lot of people that didn’t grasp fully at the time the urgency of getting this done sooner rather than later,” he said. “They were never fully prepared for the state lotteries and the states and the tribes that were going to come up and take this on.”

In Nevada, gaming leaders expressed disappointment while defending the industry’s efforts. They said they would focus now on individual states looking at legalizing online poker.

MGM Resorts International Senior Vice President Alan Feldman said the industry went to extra lengths to lobby for the bill by meeting with members of Congress and raising awareness of the issue.

“Clearly, getting Congress to act on anything was a challenge,” Feldman said.

Caesars Entertainment Corp. Senior Vice President Jan Jones, whose company owns the World Series of Poker, said the failure of the bill was disappointing to the gaming industry and poker players.

“Everybody worked real hard on this,” Jones said.

Heller “will continue to work to get legislation passed, even if it’s in the new year,” spokeswoman Chandler Smith said. Heller “believes there is sufficient Republican support to get a deal done.”

A spokeswoman for Gov. Brian Sandoval said in an email the governor “appreciates the work of the federal delegation,” and was hopeful they would continue “to work for federal legislation.”

Frank Fahrenkopf Jr., American Gaming Association president, said in a statement that he respected Reid’s judgment and was hopeful the matter could be brought up early in 2013.

John Pappas, executive director of the advocacy group Poker Players Alliance, said he was discouraged but the group would “begin the fight anew” after Jan. 1.

Looking ahead to the congressional session that begins in January, Krone offered a mixed assessment.

“Our goal is to definitely try again next year, but Senator Reid’s feeling is that after a while there comes a time when you’ve lost momentum, you’ve lost the consensus that you’ve built,” Krone said. “There will be a window next year, but I don’t see it going long.”

Nearly a dozen states could be exploring Internet poker and Internet gaming laws after Jan. 1. Nevada already has passed regulations allowing Internet poker websites that accept wagers only from gamblers playing on computers or mobile devices in the state. Some 16 casino operators and technology providers have been licensed in Nevada, but the first websites aren’t expected to go live until the spring.

Feldman said states, after establishing online gaming, might turn back to Washington.

“My fear is that at some point a state doesn’t handle this well,” Feldman said. “Then, Washington is handling this reactively, rather than proactively.”

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760. Follow him on Twitter @STetreaultDC. Reporter Howard Stutz contributed to this report. 
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