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Lobbying Heats Up Over Online Gambling Bill Lobbying Heats Up Over Online Gambling Bill

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Lobbying Heats Up Over Online Gambling Bill

December 5, 2012

State lottery directors are in town this week to lobby against Internet gambling legislation that states worry could limit their ability to expand their games online.

Lottery officials this week are meeting with members of Congress to urge them to reject a draft bill crafted by Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Whip Jon Kyl, R-Ariz. Their bill would legalize online poker while outlawing other forms of online gaming. It was drafted in response to a decision from the Justice Department last year to reinterpret the 1961 Wire Act, saying it only applies to sports betting and not other forms of online gambling. Both supporters and critics of gambling say the decision has opened the door to a major expansion of online gambling at the state level.

The bill has not been scheduled for action. But both Reid and Kyl, who is retiring from the Senate at the end of the year, have said they would like to try to move the bill during the lame-duck session, most likely by attaching it to a must-pass piece of legislation. “This remains a high priority for Senator Reid, but the fact is we still don’t have the necessary Republican votes,” a Reid spokeswoman said on Wednesday.

Lottery officials oppose the Reid-Kyl bill because it would bar state lotteries from offering any interactive games or from offering online drawings that occur more than once a day. David Gale, executive director of the North American Association of State and Provincial Lotteries, said in a conference call on Wednesday that lotteries need to be able offer their games online in order to attract new and younger players and to “remain competitive.”

“We believe it’s a significant infringement on states’ right to govern our own games,” added Arch Gleason, president and CEO of the Kentucky Lottery Corporation.

Other critics of the bill include the National Governors Association and the National Conference of State Legislatures.

Lined up in favor of the Reid-Kyl bill is a wide array of groups ranging from the American Gaming Association to the National Association of Convenience Stores to the Fraternal Order of Police. The American Gaming Association, which includes major casinos such as Caesars and MGM, launched a new lobbying campaign this week to push for action on the bill during the lame duck.

“There is a number of things that are good about the bill,” Tom Breitling, chairman of Fertitta Interactive, said in an interview last week on why his company favors federal legislation. His company received one of the first licenses from the state of Nevada to operate an online poker site. Breitling noted that the Reid-Kyl bill “fixes the Wire Act,” provides law enforcement with new tools to target illegal online gaming, and establishes a framework to regulate and tax online poker.

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