Casino Tycoon Seeks to Outlaw Online Gambling

Article excerpt

A campaign by Sheldon Adelson, a Republican donor, has divided powerful interest groups in Washington.

A push by the billionaire casino magnate Sheldon G. Adelson to outlaw online gambling has ignited a bitter civil war in the gambling industry, dividing one of Washington's most powerful interest groups and posing a major test of the Republican donor's political clout.

Mr. Adelson's effort officially kicked off on Wednesday, when lawmakers, including a senator, Lindsey Graham of South Carolina, who has accepted tens of thousands of dollars in donations from the businessman and his family, introduced legislation originally drafted with Mr. Adelson's lobbyist.

The bill would close a three-year-old loophole in United States law by banning online gambling -- a growing industry that Mr. Adelson argues is bad for casinos and gamblers -- and shutting down online gambling in a handful of states that recently legalized it.

The dispute has already largely sidelined the industry's powerful trade group, the American Gaming Association, after Mr. Adelson threatened to withdraw from the organization if it continued to back expanded online gambling, according to several industry executives.

Mr. Adelson's political prominence was on display Thursday in Las Vegas at the start of the four-day meeting of the Republican Jewish Coalition -- an event that has attracted several 2016 presidential prospects, including Jeb Bush, a former governor of Florida; Gov. Chris Christie of New Jersey; Gov. Scott Walker of Wisconsin; and Gov. John R. Kasich of Ohio.

Mr. Adelson, whose $38 billion fortune makes him one of the richest men in the world, poured roughly $100 million into Republican campaigns in 2012, and he is known for pushing ideological fights in Washington. The battle over online gambling shows how he also lobbies for his business.

Dueling branches of the casino industry are now entering the fray, employing a half-dozen former elected officials and a clutch of lobbyists and public relations strategists through a pair of strange-bedfellow coalitions.

A new group bankrolled by Mr. Adelson, the Coalition to Stop Internet Gambling, is wooing socially conservative lawmakers opposed to gambling, along with some Democrats who are worried about possible online gambling by minors. But it also features a former New York governor, George E. Pataki, a Republican who presided over a sweeping expansion of gambling in that state, including online bets on horse racing.

Rival casinos and online poker companies are counterattacking through the Coalition for Consumer and Online Protection. The group has signed up two Republican former House members, Michael G. Oxley of Ohio, who a decade ago led efforts to outlaw online betting and accused companies selling such games of "gobbling up victims in the United States," and Mary Bono of California. Mr. Oxley, who retired from Congress in 2007 and now works as a lobbyist, said in an interview that he believed state-regulated online gambling was now the best hope of countering the rapid expansion of illegal online gambling.

"The world has changed dramatically in the last 10 years," Mr. Oxley said. "I have come to the conclusion you can't try to control the Internet and the like."

Among the coalition's arguments against a ban on online gambling is one that also figured in Republicans' battle against President Obama's health care expansion: that it violates states' rights.

Some in the industry worry that a brawl between its biggest players could threaten the painstakingly built image of family- friendly entertainment the casino resorts have worked to promote.

"It is unfortunate, when an industry undermines itself," said Jan L. Jones, a former mayor of Las Vegas who is now the head of government relations at Caesars Entertainment, which is opposed to the bill. "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. …