Disagreement among industry stakeholders over how to address leading offshore poker sites and the heavy weight of ‘lame duck’ session politics are being seen as the two major reasons why the effort to legalize online poker, led by Senator Harry Reid, failed to hit the jackpot this December.

According to multiple gambling industry lobbyists in Washington, the eleventh-hour push to legalize Internet poker across the United States in this year’s lame duck session of Congress effectively ended earlier this week.
Since early December, a contingent of the gambling lobby has worked with the Senate Majority Leader, Harry Reid of Nevada, to jam a regulatory bill through the Legislature before the lame-duck session ends.

The strategy was to quietly attach Reid’s proposal to a separate, must-pass measure. But as more gambling industry stakeholders got wind of the plan, lobbyists said, compromise between them had to be brokered and new versions of the proposal drafted.

“There were a lot of intra-industry negotiations that I guess some would say slowed things up,” one lobbyist, who is retained by European online gambling interests, told GamblingCompliance.

Chiefly at issue was how to address operators like PokerStars and Full Tilt, which, to the consternation of many within the country’s brick-and-mortar gambling industry, continue to accept deposits from players in the United States.
Some major casino interests in Las Vegas, lobbyists said, were flatly opposed to allowing offshore operators to apply for licensure. Others, though, were comfortable with those operators entering the market after a penalty period.
“I don’t understand how the commercial casino industry can let the so-called ‘bad actors’ in,” a governmental affairs executive at a major US gambling operator told GamblingCompliance.

“Explain to me how anybody who’s not named Caesars Entertainment is going to compete with those guys.”

The country’s Indian gaming sector — comprised of over 230 tribes and 400 gaming establishments — was also left scrambling to get to grips with Senator Reid’s proposal, Capitol Hill sources said.

Some tribes support Internet gambling regulation, tribal lobbyists said, but others fear that online games could threaten the economic viability of their gaming establishments and communities.

“I think, generally speaking, prior to all of the activity this year, the majority of tribes were not outright opposed to Internet gambling,” a lobbyist, who is retained by multiple tribes in the Southwestern United States, told GamblingCompliance.

“I think they weren’t exactly expecting authorization to come up so quickly after UIGEA was passed. So, for a total sea change in policy, they just weren’t geared up for it.”

Meanwhile, the heated political climate in Washington during the lame-duck session was not conducive to an Internet gambling bill passing, some lobbyists said.

Two weeks ago, Reid was reportedly mulling whether to attach a version of his online poker proposal to a bill that would extend income tax cuts enacted earlier this decade.

But that effort ran into stiff opposition from leading Republicans, including Sen. Jon Kyl of Arizona, who told a Capitol Hill newspaper that there was “zero chance” Internet gambling language would appear in the tax-cut legislation.
And it did not.
Last week, moreo

ver, a move to affix an updated version of Reid’s proposal to a trillion-dollar spending bill did not materialize.

“The politics were pretty overwhelming in this shortened session,” the governmental affairs executive said.

“You had the macro-politics of Republicans arguing against doing anything outside of continuing current operations and extending the Bush tax cuts.”
Although Reid was rumored to be looking at a health-benefits bill for 9/11 responders as a vehicle of last resort for his poker measure, lobbyists said it was not in play.  

“I talked to my team in Washington [on Tuesday], and they confirmed that the only vehicle left is the 9/11 health bill and that, procedurally, there would be no possible way to get that done,” the governmental affairs executive said.
“The Reid Bill is not going anywhere this year,” the lobbyist representing European firms echoed this week. “There was no suitable vehicle in the end.”
When asked this week to confirm whether the legislative push was dead, Zac Petkanas, a spokesman for Reid, told GamblingCompliance: “Senator Reid continues to work on getting it done. If not this year, then next.”

The lame duck session of Congress was due to end late last night, though, and it remains to be seen how poker advocates will proceed in 2011 when Republicans will assume control of the House of Representatives and also enjoy greater influence in the Senate.