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Money for Nothing

Black Friday' shrinks U.S. online lobbying spend, report finds

In the first half of 2011, lobbying spend on internet gambling issues at the federal level fell markedly on a combination of unfavorable political conditions and the Black Friday indictments, according to a new report from GamblingCompliance.

During the first quarter ended March 31, 52 different special interest groups spent an estimated $3.93 million lobbying internet gambling in Washington, D.C., down 12.4 percent compared to the preceding quarter, according to GamblingCompliance’s “U.S. Internet Lobbying Spend—H1 2011” report.

The decrease in spend, some lobbyists told GamblingCompliance, reflects the diminished prospects for internet gambling legislation in a new session of Congress controlled largely by the Republican Party. 

After the midterm elections in 2010, the Republican Party—long known for its hostility toward internet gambling regulation—won control of 242 of 435 seats in the House of Representa-tives and 47 of 100 seats in the Senate, giving it a powerful foothold in the capital.

In response to the unfavorable political conditions in Washington, leading special interest groups that endorse internet gambling regulation—including Caesars Entertainment—spent significantly less than they did in the fourth quarter of 2010, when Harry Reid, the Senate majority leader from Nevada, tried to jam an internet poker draft bill through Congress. 

During the second quarter ended June 30, 54 different special interest groups spent approximately $3.6 million lobbying internet gambling, down 8.3 percent versus the prior quarter.

The decrease in spend was partly attributable to April 15’s federal enforcement action targeting executives at PokerStars and Full Tilt Poker. 

Prior to that action, both businesses were key financial backers of the Interactive Gaming Council, or IGC, a trade group that, in addition to lobbying for internet gambling regulation, contributes funds to the Poker Players Alliance, or PPA.

For perspective, in the second quarter, the IGC slashed lobbying expenditures by $115,000, or 28 percent, relative to the first, while the PPA reduced expenditures by $30,000, or 7 percent, during the same period.

In addition to the federal probe into PokerStars and Full Tilt, some lobbyists told GamblingCompliance, the prospect of a Republican-controlled House continued to dampen enthusiasm—both among special interest groups and politicians—for internet gambling regulation.

Just as in the first quarter, a number of internet gambling supporters, including the American Gaming Association, Churchill Downs and GTECH, reduced lobbying expenditures in the second quarter.

In the first half of 2011, three internet gambling bills were introduced.

The first, HR 1174, would authorize numerous forms of internet gambling between participating states and Indian nations; the second, HR 2230, would establish a tax regime for internet gambling as authorized under HR 1174; and the third, HR 2236, would authorize internet poker between participating states and Indian nations. 

Lobbyists told GamblingCompliance that a fourth bill may be introduced in the Senate as early as this fall. The measure, they said, will be limited to poker only, and sponsored or otherwise supported by Reid.  

Notably, special interest groups headquartered in Reid’s home state, Nevada, accounted for over 25 percent of total internet gambling lobbying expenditures in the first half of 2011.

Special interest groups based in 17 other jurisdictions—from California to France, from Washington state to the Isle of Man—accounted for the balance of expenditures.

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