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Tuesday, April 01, 2014

The Online Gambling Battle

Last week, a bill was introduced in Congress that would make almost all online gambling illegal.

I say "almost" because there's a carve-out for horse racing, which is a vital industry to Kentucky, home state of Mitch McConnell, the Senate minority leader. But the bill would make online poker and other internet gaming against the law everywhere, including the three states where it's now up and running (within the borders of New Jersey, Delaware, and Nevada).

The bill made it to Congress because of the influence of one man -- Sheldon Adelson, the billionaire who runs Las Vegas Sands, the corporation which owns the Venetian in Las Vegas and Macau, China. Adelson is the guy who bankrolled Newt Gingrich and other losing candidates in the 2012 elections, to the tune of $100 million of his personal wealth.

When you're willing to throw that much money at politicians, they do your bidding. That's why several Republicans considering a run for the presidency in 2016 were in Vegas this weekend for a four-day festival of sucking up to Adelson, telling him what he wanted to hear about Israel and the evils on online gambling. It's also why GOP Senator Lindsay Graham -- who was never publicly against online gambling until he received tens of thousands of dollars in donations from Adelson -- proposed the bill in Congress last week.

On the other side of the argument are corporations like Caesars Entertainment and MGM Resorts International, who are pulling their own strings through lobbying groups like the Coalition For Consumer And Online Protection, which has hired its own former members of Congress, like Republicans Mary Bono and Mike Oxley. Oxley, who represented part of Ohio for 13 terms, joined me on America Weekend to discuss the new bill.

As I pointed out in our conversation, legislation like this smacks of hypocrisy from people who are always touting free market principles. The bill is all about protecting Adelson's brick and mortar casinos from online competition -- akin to the states that have banned Tesla selling its electric cars directly to consumers because auto dealers made noise in the legislatures.

I was not caught up in the culture of online poker that preceded Black Friday (April 15, 2011), when the Justice Department cracked down on PokerStars, Full Tilt Poker, Absolute Poker, and other sites operating across America. But it rankles me that the government feels it has the power to tell me (or any American) what to do with my recreation dollars.

There's no law against buying hundreds of Peyton Manning bobbleheads or Picasso paintings or all the cowboy hats you want. You can spend as much money as you like on Amazon or eBay or be a major Home Shopping Network addict and no government agency will stop you. There's not even a limit on the number of tickets you can buy for the lottery run by your state, or bets you can place on a horse race, or the amount you can gamble in a casino (Missouri's experiment with a loss limit was so unpopular we voted it out of existence in 2008).

So where does government at any level get the authority to tell us we can't play cards for cash online?

I asked Oxley whether the Adelson-funded anti-online-gambling bill has any chance of passing, and where he expects things to go from here. My gut says that Adelson will be about as successful with this effort as he was with his candidates in 2012, because once California and others adopt intra-state online poker, and then team up with the rest (NJ, NE, and DE) in a multi-state operation, the tax dollars will be too much for legislatures to turn down.

Don't forget companies like Zynga, operator of some of the most popular games on Facebook, which is just itching to extend its real-money internet gaming to America from Europe, where it brings in big bucks. Maybe they need to buy a few politicians, too.

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