Given the more than $100 million that Sheldon Adelson has donated lately to Republican causes, the billionaire casino tycoon is well-positioned to get what he wants from a GOP-dominated Congress.
But it turns out that the item on top of Adelson’s wish list — a ban on Internet gambling — is encountering resistance. And it’s not Democrats who stand in his way but a small group of fellow conservatives.
At issue is whether the proposed change in federal law sought by Adelson would violate a core conservative principle of states’ rights, which has been an animating issue for many tea party activists.
Online betting has been embraced by a number of Adelson’s industry rivals and several states eager for the additional tax revenue it provides. Adelson said he approaches the issue more as a father than a businessman — arguing that Internet gambling poses dire consequences to children, who could be lured to an addictive activity, or college students, who could rack up debilitating debts from their dorm rooms. Yet the move to the Internet has also been seen as a threat that could deplete the customer base for Adelson’s brick-and-mortar casino resorts.
The debate points to a newly visible complication for modern-day political megadonors, who are gaining influence with policymakers in an era of unlimited contributions but can also encounter friction when pursuing policies seen as helping their economic interests.
States “don’t need the federal government babysitting them,” said Grover Norquist, president of Americans for Tax reform, who joined 10 other conservative- group leaders this week to send a letter to lawmakers urging them to “preserve the authority of the states” and reject the proposed ban.
Lobbyists for Adelson’s Las Vegas Sands Corp. have been working in recent weeks to press for quick passage of the measure, holding discussions with aides to House Speaker John A. Boehner (R-Ohio) and Senate Majority Leader Harry M. Reid (D-Nev.).
Half of the 22 Republican members of the House Judiciary Committee have co-sponsored the Adelson-backed legislation.
A House hearing on the bill, which was originally drafted by a Sands lawyer, had been tentatively scheduled for early December in hopes it might be considered by the full House before adjournment. The hearing, however, was called off this week as conservative opposition began to emerge.
Norquist and the leaders of the other groups, including the American Conservative Union, did not mention Adelson by name. But their letter follows the publication this week of a fiery online column by former congressman Ron Paul (R-Tex.), the libertarian hero and father of potential presidential candidate Sen. Rand Paul (R-Ky.). He called the bill an example of “crony capitalism” written “for the benefit of one powerful billionaire.”
A spokesman for the Adelson-backed coalition supporting the ban did not respond directly to the criticism but said the change “remains an important goal for our coalition and for families across America.”
Adelson, 81, whose company owns casino resorts in Nevada, Macao and Singapore, is the eighth-richest person in the world, according to a Forbes Magazine survey. He has emerged over the past two elections as the Republican Party’s most prolific donor. He and his wife spent more than $90 million in 2012 supporting Republican candidates.
Adelson and his wife personally made more than $5.9 million in federal donations during the 2014 midterm election cycle, making them the eighth-biggest “individual donors” in the country this year as ranked by the Center for Responsive Politics. That total would not include money that Adelson may have given to pro-GOP nonprofit groups that are not required to identify their donors.
The casino owner has said that he intends to spend millions more in 2016 to elect a Republican president, prompting early jockeying by potential candidates to spend time with Adelson.
Adelson last year launched a campaign warning that Internet betting could harm children and other vulnerable people by giving them unfettered access to, in effect, a casino in their pocket. His allies argued that the effects could tarnish the industry’s traditional business model, which relies on drawing people to destination resort hotels.
Other casino companies, including Caesars Entertainment and MGM Resorts, have disagreed, arguing that regulated Internet gambling would be safer than unregulated games hosted by companies that operate offshore. They also say that online gambling could boost revenues, a position shared by a growing number of governors and state lottery officials. Three states have recently legalized some forms of Internet gambling, with half a dozen others considering the idea.
In Washington, Adelson and his team confront a delicate strategy decision. While the GOP megadonor will surely gain clout with Republicans running both the House and Senate next year, he also has a good relationship with Reid. The two are political foes in many respects, but as fellow Nevadans they share an affinity for the home-state gambling industry. And Reid, facing a tough reelection in 2016, stands to benefit from continued warm relations. Even if Adelson is not a direct benefactor to Reid, he could minimize his role in the Nevada Senate race.
A Reid spokesman did not respond to requests for comment. A spokesman for Boehner said staffers have met with proponents and opponents of the bill since the election but did not comment further.
People familiar with Adelson’s strategy say his team is seeking a deal with congressional leaders that could include attaching the online gambling ban to a must-pass spending bill during the lame-duck session that ends in December.
Adelson’s top lobbyist, Andy Abboud, declined to comment for this story. He told the gambling trade press this month that Reid and Boehner were actively engaged on the issue.
“I know they’ve had some discussions to some degree about when legislation could move and the need to address the issue,” Abboud told GamblingCompliance, an industry newsletter. “It’s just not clear as to when the timing will be.”
Speaking with Nevada television journalist Jon Ralston, Abboud expressed confidence that a federal ban would be considered in Congress soon, either this year or next year. “The die is cast on this,” Abboud told Ralston. “The cake is baked.”
Adelson’s opponents have described a furious, behind-the-scenes push by both sides in recent days.
John Pappas, director of the Poker Players Alliance, which favors expansion of online gambling in the United States, said lobbyists working for and against the proposed ban have been seen frequently in the offices of members of the House Judiciary Committee.
Online gambling in the United States became a legal possibility thanks to a 2011 Justice Department opinion that cleared the way for states to allow many forms of online betting, which had previously been considered a violation of the Interstate Wire Act, a 1961 statute that prohibited wire “transmission in interstate or foreign commerce of bets or wagers.”
Several casino companies and allied groups moved quickly to sell the idea of online gambling as a source of revenue for state governments, which say they can deploy technology to make sure people only from the states allowing the activity log on to gamble.
Adelson called the 2011 Justice Department legal opinion a mistake and has taken steps to rein in online gambling, fighting state-level proposals to authorize it and pushing for the federal ban. A company lawyer penned an initial draft of the Restoration of America’s Wire Act — later refined and introduced last year by Sen. Lindsey O. Graham (R-S.C.) and Rep. Jason Chaffetz (R-Utah) — which would effectively prevent states from authorizing online betting.
The legislation has since picked up 18 co-sponsors in the House and three in the Senate, including a Democrat, Sen. Dianne Feinstein of California, whose home state is considering legalizing online poker.