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Protecting Casinos & Robbing States of Revenue Most Important Issue for Harry Reid

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Democrat Senate Majority Leader Harry Reid hasn’t had time to pass a Senate Budget in nearly four years but he’s found a way to give states more debt and unemployment headaches. As states struggle to balance their budgets in the worst economic recovery since the Great Depression, Senator Reid wants to federalize online poker, effectively robbing states of BILLIONS of dollars in lottery revenue.

As reported by Politico, Reid allied himself with Republican Senator Jon Kyl to draft a bill that would federalize online poker and ban states from offering ALL other forms of Internet gambling. This would inoculate casinos in Reid’s state of Nevada from competition along with tons of Indian casinos in Kyl’s state of Arizona. In effect the Internet Gambling Prohibition, Poker Consumer Protection and Strengthening UIGAE Act of 2012 has made state lotteries enemy number one!

Many states from DC to California are contemplating offering online gambling, which has casinos in Nevada and Arizona shaking in the boots because it could kill their “game.” Something smells rotten and Messieurs Reid and Kyl seem to be the main bearers of the stench. Both Senators’ campaign donations probably show huge donations from the American Gaming Association, Indian casinos and other big commercial casinos.

Despite Nevada’s 12% unemployment rate, well above the national average of 8%, Reid wrote a letter to Nevada Senator Dean Heller that federalizing online poker was “the most important issue facing Nevada since Yucca Mountain.” (For reference, Yucca Mountain was the proposed location where the federal government wanted to dump America’s entire nuclear waste.) This hardly seems to meet the Yucca factor.

Senate Majority Leader Reid appears to be intent on pushing an anti-competitive gaming bill that not only violates states’ rights under the 10th amendment but also flies in the face of the Justice Department’s review of the matter. In 2011, the Department of Justice reviewed the 1961 Interstate Wire Act and found it only prohibits Internet sports gambling not other forms of online betting.

States depend upon lottery revenues to support public education and other programs. Lottery revenues also help create jobs and boost state economies through retail locations, small and big businesses, which sell lottery tickets and in turn make money to hire people. In 2009, the 44 states with lotteries made $17.6 billion in revenue and in 2010 that increased to $17.9 billion of revenue, which supported state budgets and provided critical services to residents, particularly the poor.

In a letter to Reid and House Speaker John Boehner, New Hampshire Governor John Lynch warned “Federalizing Internet gaming would put at risk the $70 million a year that New Hampshire generates from its state lottery,” which goes “directly toward supporting public education at the local level.” Governor Lynch further noted, “The lottery also provides $14 million a year in direct revenue to New Hampshire small businesses.”

Idaho Governor Butch Otter also warned in a letter to Congresswoman Mary Bono, Chairman of the House Subcommittee on Commerce, Manufacturing and Trade, “The states have extensive experience in the gaming arena. Accordingly, any federal encroachment on this traditional state prerogative is ill-advised.” Governor Otter added the state’s lottery generates significant revenue to Idaho.

Due to President Obama’s failed policies, states have been saddled with declining revenue because people don’t have jobs to pay taxes or are earning less money. By seeking to ban state Internet gambling, Senators Reid and Kyl want to neuter an important vehicle states use to boost revenue all in the name of protecting fat cat casinos from competition in their states. No wonder Reid did nothing but spend America into debt and joblessness with his 60-vote majority during the first two years of Obama’s presidency; he’s focused on the wrong things! Sadly, Senator Kyl is willing to walk down this shameful road with him.

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