Delaware online gambling legislation dooms federal regulatory push


fat-lady-sings-federal-online-gamblingDelaware is one of 33 US states whose laws stipulate the death penalty for certain crimes. When Gov. Jack Markell signed his state’s pioneering online gambling legislation into law on Thursday, he may as well have signed a death warrant for the push to enact similar laws at the federal level.

Markell’s signature came almost six months to the day that the US Department of Justice’s revised opinion on the scope of the Wire Act became public. Since this confirmation that individual states are free to permit their residents to enjoy online gambling other than sports betting, the Illinois Lottery has begun selling single lottery tickets online and Delaware has enacted the country’s first full-fledged online gambling legislation. (Nevada had already passed its own online poker-only legislation before the DoJ opinion was made public.) California’s poker bill may have stalled amidst infighting over who will share in the spoils, but New Jersey is expected to have legislation similar to Delaware’s poker-and-casino-games scheme ready for Gov. Christie’s signature by this autumn.

As the states continue to rewrite the facts on the ground, the most recent federal online poker bills – Rep. Joe Barton’s HR2366 and Rep. John Campbell’s HR1174 – have been kicking around the House of Representatives for over a year, yet have picked up just 30 and 29 supporters respectively during this time. In the Senate, majority leader Harry Reid (D-NV) and Sen. Jon Kyl (R-AZ) have yet to confirm or deny the widely disseminated rumor that they are planning to introduce a bipartisan online poker bill during the lame-duck session of Congress following November’s presidential election.

Yet even if Reid and Kyl gain some traction in the Senate, things will likely bog down in the House. Las Vegas Sands chairman Sheldon Adelsona staunch opponent of online gambling – has garnered plenty of headlines this year via his multi-million dollar donations to Republican causes. On Friday, Politico reported that Adelson had written the GOP yet another check – this one for $10m – at a deep-pocketed donor summit in San Diego. That’s on top of the $20m Adelson gave to Newt Gingrich’s failed bid for the Republican nomination, $10m to a Mitt Romney political action committee, up to $20m to an outfit run by GOP strategist Karl Rove and $5m each to two groups linked to House Speaker John Boehner and House Majority Leader Eric Cantor – and the eighth-richest man in America has suggested he will continue to make it rain right up until election day in November.

Adelson’s connection to key House figures may be the ultimate stumbling block for plans to pass federal online gambling legislation. An industry lobbyist recently told the Las Vegas Sun’s Anjeanette Damon that Adelson and Cantor “talk all the time; it’s an ongoing dialogue.” The potential ramifications of this relationship can’t be minimized, given that “Eric controls the agenda” in the House. And lobbyists note that Adelson’s stance against online gambling is hardening. “He’s gone from, “I’m against it, but I won’t be active in it,’ to making more public statements against it, and now he’s told important people in Congress he’s against it.” If, as most observers expect, the Republicans maintain control of the House in November, it seems illogical that their first move would be to pass a piece of legislation so vehemently opposed by their sweetest sugar daddy.

Over its nearly three years of existence, has not been shy about sharing its belief that the US domestic online gambling industry would roll out slowly, on a piecemeal, state-by-state basis, and that foreign firms were never going to get a slice of this pie, other than in a strictly limited tech-provider role. We’ve also taken our fair share of shots at those companies that have spent millions lobbying federal politicians on the issue of online gambling – all of which appears to have been for naught. We’d humbly suggest that all moneys earmarked for future lobbying efforts be sent to us instead. Unlike those folks on K Street, we’ll tell you what you need to know, rather than what you’d prefer to hear.