State AGs fight against Internet gambling

Casino magnate and GOP super-donor Sheldon Adelson has won some powerful new allies in his quest to ban Internet gambling.

At least 10 state attorneys general have signed onto a letter to congressional leaders and the House and Senate Judiciary committees asking Congress to keep online gaming illegal, according to people familiar with the lobbying effort.

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“Online gambling exacerbates problems associated with gambling addiction and we’re proud to be working with a number of other states to address the issue,” reads the letter from the state officials.

Their lobbying effort bolsters Aldeson, who is dipping into his casino fortune to stop online gambling on the grounds that the sites would be harmful to young people and create addictive behavior.  

“Look, I’m a father, grandfather. I do not want my children — I’m a veteran of the Korean War. I do not want my children to have the opportunity to become addicted to gaming. And poker, in my opinion, would become one of the most addictive games,” Adelson told Bloomberg last summer.

Three states — Nevada, New Jersey and Delaware — legalized online gambling after 2011, when the Justice Department ruled that the anti-fraud Wire Act only prohibits online sports betting, and not other types of online gambling.

The group of state officials — led by the Attorneys General from Missouri, Chris Koster (D), Nebraska, Jon Bruning (R), and South Carolina, Alan Wilson (R) — want lawmakers to stop the gambling movement by clarifying the anti-fraud law.

“Given the inherently interstate nature of Internet gambling transactions, we anticipate that it will become increasingly difficult to effectively regulate such conduct as additional jurisdictions consider legalizing Internet gambling.”

The state attorneys general are an important constituency for casinos. As the top law enforcement official in each state, they would be responsible for enforcing any online gaming rules.

The officials appear to have signed onto a letter that Adelson’s casino company, Las Vegas Sands Corp., presented last year during a presentation to the Republican Attorneys General Association.

A spokeswoman for Bruning declined to comment on the apparent link between Adelson and the letter.

Bruning “always has been, and continues to be, strongly opposed to expanded gambling,” a spokeswoman said in a statement.

Advocates for online poker — which would be legalized under legislation from Rep. Joe Barton (R-Texas) — are fighting back by asking supporters to pressure their state Attorneys General not to sign the letter.

The Poker Players Alliance has had their supporters send “nearly 8,500” tweets and “more than 9,000” letters and emails to their state officials, according to the group’s Executive Director John Pappas.

Pappas said Adelson is pushing Congress to pass legislation that would add language to the Wire Act explicitly prohibiting online gambling.

“Having the Attorneys General letter would be a component of getting a sponsor for that bill,” Pappas said.

The letter could be important “if it’s influential states that are coming forward” to sign it, but potentially significant players — including California, Illinois and Massachusetts — are instead considering legalizing online gambling, Pappas said.

He said an addition to the Wire Act would “create a complete legal quagmire” for the three states that already legalized online gambling within their borders and would crush efforts in other states that are considering legalization.

Pappas called the letter “a really curious tactic” for state officials who claim to support states rights. Rather than supporting the rights of states to set their own laws, the attorneys general who have signed on to the letter are asking Congress to preemptively ban states from legalizing gambling within their own borders, he said.

On the Hill, Barton is not letting this opposition stop him from working on his online poker bill, according to a spokesman.

“Our office is aware of the letter, but we are still actively working on Mr. Barton’s poker bill because it is the only way to ensure that we have one uniform set of rules,” the spokesman said.

“One of the main goals of the Poker Freedom Act is to protect players from a patchwork regulations that varies by jurisdiction and could open the door to fraud.”

— Kevin Bogardus contributed.