Online gambling advocacy group critical of U.S. banning attempt

The online gambling advocacy group Safe and Secure Internet Gambling Initiative has issued a statement ridiculing the newly launched Chaffetz and Graham Congressional bills seeking to ban all online gambling in the United States with the exception of horseracing.

SSIGI spokesman Michael Waxman said in a press release Thursday:

“The idea that Congress could or would ban internet gambling is ludicrous and downright foolish. Whether you like the idea of allowing access to internet gambling or not, Americans are currently wagering billions a year online, most of which occurs in an unregulated marketplace. Given the freedom of the internet, attempts to prohibit this activity have never worked and will never work.

“While Federal oversight is needed, individual states should decide whether to allow internet gambling within their borders. Graham and Chaffetz should respect the right of each state, not force a rollback of an industry that has already started to flourish in the US.”

Waxman was also critical of Sheldon Adelson, the land casino magnate and influential Republican Party donor who is driving the move to federally outlaw online gambling in the US:

“It’s laughable and completely disingenuous that a casino mogul would come out so forcefully against gambling online because, in his view, it’s the only way to protect consumers. While Adelson preaches the need for prohibition, I certainly hope clearer heads prevail and acknowledge [that] his actions are purely driven by bottom-line greed to the detriment of what’s truly best for consumers.”

In other developments this week, Adelson detractors pointed out that his Las Vegas Sands land gambling company promotes and offers mobile sports book betting, and that back in 2003 Adelson apparently had fewer moral concerns about internet gambling – one of his companies received a licence to run an offshore gambling centre in Alderney, an independent jurisdiction in the Channel Isles off France. In filings with the Securities and Exchange Commission, the company reported that it had spent $1.3 million exploring the feasibility of operating an Internet gambling site there.

Other critics suggested that the Chaffetz and Graham bills had no exemptions for individual state lotteries, and that such an omission could produce a negative impact on state finances estimated by one analyst at $20 billion.

In the absence of a “grandfather clause” further financial losses could be created in states like Nevada, New Jersey and Delaware, where commercial concerns have already made substantial investments in legalised online gambling, and serious potential tax losses could be generated in the ten or more states that are actively considering the introduction of online gambling in various forms.

So far the Graham-Chaffetz banning bills have not attracted too much support; politicians recognise such sensitive issues as states’ rights and are clearly cautious.

One Democratic Party Senator who has voiced support is Dianne Feinstein of California, widely regarded as the next state most likely to embrace legalisation of online poker.

Sen. Graham’s support in the Senate is presently confined to Feinstein and two Republicans – Senator Mike Lee from Utah (where all forms of gambling are banned anyway) and Senator Kelly Ayotte of New Hampshire, a vocal opponent of gambling.

In the House Chaffetz can at present count on the support of probably eight Representatives, among them Rep. Tulsi Gabbard from Hawaii (also a state where there is no gambling).

One political journalist noted that garnering Democratic Party support for bills that are clearly associated with one of the Republican Party’s biggest and most self-interested donors could be a challenge.

The rift between Adelson and other land gambling barons on the internet gambling question was reported in the New York Times this week, which suggested that Adelson has effectively sidelined the American Gaming Association by forcing its chairman to dial down on its pro-online gambling rhetoric:

“Mr. Adelson threatened to withdraw from the organisation if it continued to back expanded online gambling, according to several industry executives,” the newspaper reported, going on to quote pro-online gambling land casino group Caesars Entertainment spokesperson Jan Jones, who said:

“It is unfortunate, when an industry undermines itself. This fight is tarnishing the entire industry. You just raise a whole specter of negativity that I think is unfortunate and inappropriate, after we have spent the last three decades with a message that gaming is just entertainment enjoyed by responsible adults.”

Senator Graham’s re-election financing was also highlighted in the New York Times report, which revealed that in addition to the upfront money directly donated to his campaign by the Adelsons, the multi-billionaire had hosted a fund-raiser for Graham in Las Vegas last April, and has in the past written six- and seven-figure checks to super PACs (political action committees) like one now backing Graham’s re-election campaign.

At a news conference on Wednesday, Graham was asked if he and other co-sponsors were operating as Adelson emissaries.

“I would say that Sheldon has aligned himself with most Baptists in South Carolina,” the Senator from South Carolina responded. “I am on solid footing in South Carolina with people I represent. The fact that Sheldon is on board is a good thing.”

In Nevada, where Senators Harry Reid and Dean Heller have in the past unsuccessfully tried to achieve federal bans on online gambling with an online poker carve-out that benefits their corporate constituents, the two senators were non-committal, suggesting that they first needed to study the Chaffetz and Graham bills before taking a position.

However, as the bills stand now, with no online poker exemptions and the possibility of derailing Nevada’s intrastate newly legalised online poker market, it is unlikely that they will be enthusiastic.

Things could change once the political horse-trading starts as the bills progress through the Congressional system.

Three Republican governors are definitely on board with the Adelson initiative are Texas governor Rick Perry; South Carolina governor Nikki Haley and Louisiana governor Bobby Jindal, who have asked Congress to approve a ban on grounds that internet gambling compromises the ability of states to control gambling within their borders.

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