Adelson Visits DC to Reboot Effort to Outlaw Online Gambling

Neil McCabe
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Posted: Jan 28, 2015 10:06 AM
Adelson Visits DC to Reboot Effort to Outlaw Online Gambling

After spending millions of dollars to help elect a Republican House and Senate, Capitol Hill sources report Las Vegas gambling mogul Sheldon Adelson received a private briefing with Republican members of the House Judiciary Committee in the second week of January.

The meeting sends a strong signal that the billionaire, who is one of the most generous contributors to Republican candidates and campaigns—ever, will not retreat away from his desire to outlaw legal and regulated Internet gaming by the states.

Sources familiar with Adelson's lobbying describe the meeting as both a strategy session and an update for the gambling mogul.

It is unclear as to whether the briefing was set up by Adelson's lobbyists or whether it occurred at the insistence of the House leadership, although an aide with direct knowledge of the House Judiciary Committee denied the briefing was officially organized or coordinated through the committee.

It was reported that Adelson spent and donated more than $90 million toward GOP candidates and causes in 2014.

Adelson's private meeting with GOP members of the House Judiciary Committee further complicates an already disjointed Republican conference as the congressmen attending in effect have formed a rump committee outside the regular order and hidden from public scrutiny.

Members and staff were guarded when asked on multiple occasions about the briefing.

Adelson, the chairman and CEO of Las Vegas Sands, a $14 billion-a-year gaming conglomerate, has pledged to "spend whatever it takes" to get Congress to pass a federal ban on online gambling, but he failed to make the tape as the last session closed.

The effort was two-pronged. One prong was an advocacy group called the Coalition to Stop Internet Gambling. The second was legislation that would legislatively reverse the Department of Justice's 2011 interpretation that the 1961 Wire Act does not forbid internet gambling—framed as the restoration of the Wire Act.

The effort has also created the awkward situation, where conservatives and libertarians—often the beneficiaries of the $100 million Adelson has contributed to GOP candidates and campaigns—have to tell the man that they cannot outlaw his online competition, even if it is the only thing he ever asked them to do for him.

This awkward caucus is in three camps.

Some members are put-off by the big ask. Other members have no issue with online gambling as a business, a lifestyle or as a individual's choice. The others are part of the growing neo-federalism movement that seeks to devolve authority and control out of Washington back to the states and the people.

In the new session, two of Adelson's key allies, Rep. Jason E. Chaffetz (R.-Utah) and Sen. Lindsey O. Graham (R.-S.C.), and the lead sponsors of the restoration bill have returned to Washington stronger than before.

Both men sit on their chamber’s judiciary committees, while Graham is now a member of the Republican majority and Chaffetz is now chairman of the Government Oversight and Reform Committee.

Conservatives were disappointed Chaffetz defeated Rep. James D. Jordan (R.-Ohio) in the contest to succeed Rep. Darrel Issa (R.-Calif.). Issa was not as cooperative with leadership as Chaffetz and Jordan is disliked by some in leadership for his principled stand on issues important to conservatives.

Now conservatives are waiting and watching to see in Chaffetz continues Issa's watchdog magisterium, or whether uses the committee's mandate and subpoena power to advance his own agenda—including the federal ban on internet gambling.

The speculation in the hallways is that Chaffetz will allow Issa's projects to fallow for another day, while he investigates the people and process involved in the 2011 reversal by the Justice Department.

In the lame duck session, Adelson allies tried to force an official hearing of the House Judiciary Committee on the restoration bill, but the House Judiciary Committee Chairman Richard W. Goodlatte (R.-Va.) did not play along—despite being an adamant opponent of web-based gambling.

Like many Republicans on Capitol Hill, Goodlatte is a devotee of the 10th Amendment, which he views as a vital and neglected bulwark against the federal government.

Michelle Minton of the Competitive Enterprise Institute has detailed the legal background of the issue in detail making a strong and persuasive effort that the issue is best handled by the states, rather than through federal intervention.

Minton’s intellectual ammunition has been vital to Capitol Hill conservatives looking at the online gambling and other issues through the 10th Amendment filter.

As for Goodlatte, the Virginia congressman is a member of the 10th Amendment Task Force and in 2011 during a formal reading of the Constitution by members on the House floor, it was the 10th Amendment Goodlatte chose to read.

The Adelson bill has repeatedly been condemned, as an assault on the 10th Amendment for it would outlaw state legalization of gambling within their borders, which strikes at the federal system of state sovereignty in all matters not specifically assigned to the national government.

If leadership attempts to force passage of the bill, it will put Goodlatte's principled stand in support of the Constitution in direct conflict with one of the GOP's biggest donors.

The battle over internet gambling, if it was being played out in a city hall or state house, would be a simple matter of power politics. Big donor and his big ask.

But now, Adelson’s effort to outlaw his online competitor tamper with the constitutionally relationship between the states and the national government on a higher plane and come just as President Barack Obama is reworking the Constitution as a living document in some many other ways.