Legalizing Internet poker gets push from Harry Reid in lame-duck session

By Dan Eggen
Washington Post Staff Writer
Saturday, December 11, 2010; 12:00 AM

As it scrambles to consider landmark legislation on taxes, immigration and gays in the military, the lame-duck Congress is suddenly engaged in a debate it didn't anticipate: whether to legalize online poker.

Senate Majority Leader Harry M. Reid (D-Nev.) is pushing a bill that would give official government approval to Texas hold-'em, five-card stud and other Internet poker games, which currently exist in a legal twilight zone dominated by companies operating from the Isle of Man and other exotic foreign locales.

The idea is to lure some of that multibillion-dollar business into the United States - and give the federal government up to $3 billion in annual revenues in the process.

The measure would be a boon for Las Vegas-based casinos, which supported Reid in his hard-fought reelection campaign and are eager to enter the lucrative world of online gaming. Many states and localities, including the District, have started thinking about legalizing Internet gaming on their own, giving federal lawmakers even more incentive to act.

"Under the status quo, Internet poker is played by millions of Americans every day in an essentially unregulated environment," Reid said in a statement this week. "The legislation I am working on would get our collective heads out of the sand and create a strict regulatory environment to protect U.S. consumers, prevent underage gambling and respect the decisions of states that don't allow gambling."

The bill's chances are uncertain at best, and Democratic staffers are struggling to find a way forward that doesn't bog down other legislation. But backers say the proposal offers the best odds yet for online-poker proponents, who until now have gained little traction despite millions of dollars in lobbying and campaign contributions.

Many conservative groups and GOP lawmakers, however, strongly oppose the measure, seeing it as an official sanction of immoral behavior. Legalizing poker - or any other type of online gaming - is far less likely with Republicans in control of the House next year, according to many legislative aides and lobbyists.

Lawmakers in New Jersey and California are pushing ahead with plans to legalize online gaming in those states. D.C. Council member Michael A. Brown has proposed legalizing online poker and fantasy sports gambling as a way to slash the city's $200 million budget deficit.

The Senate poker legislation was written with help from major gambling and casino interests, who played a significant role in funding Reid's expensive reelection campaign, according to lobbyists and legislative aides. Reid has collected more than $1.6 million in contributions from gaming companies and their employees over the past two decades, according to the Center for Responsive Politics.

Two major Las Vegas casino companies, Caesars Entertainment and MGM Resorts International, also gave a combined $375,000 to an outside Democratic group, Patriot Majority, that ran election ads in favor of Reid this fall, records show.

Reid and his supporters say the bill is a common-sense and limited solution to the problem of unregulated online poker, which is played by an estimated 10 million Americans. Proponents say a 2006 law banning financial transactions for online gambling has had little discernible effect.

"Certainly Vegas interests will be well served by this, but this is first and foremost a consumer protection issue and an opportunity for job creation and revenue for governments," said John Pappas, executive director of the Poker Players Alliance, a group that has ties to offshore gaming firms and has been pushing for legalization. "If lawmakers believe the status quo is acceptable, they're not facing reality."

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