Gambling and the Law: In defense of lobbysts

31 August 2010

By I. Nelson Rose

"Okay, you've convinced me. Now go out there and bring pressure on me." --- President Franklin D. Roosevelt Lobbyists, and their clients, "special interests," often get a bum rap. Lobbyists rarely give bundles of cash to corrupt politicians. Their main goal is to persuade legislators and regulators on behalf of their clients. They do this by providing information that no one else can. For example, lobbyists for tribes with casinos have done a good job of educating members of Congress on the meaning of sovereignty. As President Roosevelt noted, lobbyists also have to get politicians to act. Today, organizations like the Poker Players Alliance ("PPA") are arguing that millions of Americans want their favorite past-time made legal. This provides political cover. And lawmakers also need to get reelected. I personally like the implied threat in the name of the leading advocacy group in California: Poker Voters of America. It is safe to say that Barney Frank's (D.-MA) Internet poker bill would not have been approved by the House Financial Services Committee in July without the intense work of lobbyists. They did such a good job that even a few Republicans voted for it. Advocacy groups can influence regulators as well as elected officials. The PPA, with horse and dog track associations, filed a petition with the Federal Reserve and Treasury, successfully extending enforcement of the regulations for the Unlawful Internet Gambling Enforcement Act until June 1, 2010. The leading casino lobbying group is the American Gaming Association ("AGA"), created when the Clinton Administration proposed a 4% tax on gambling operations' gross receipts. The AGA and its President and C.E.O., Frank J. Fahrenkopf, Jr., showed how this would put a lot of casinos out of business. They put together a coalition of industry groups that would be hurt if casinos folded, including airlines and hotels. Then the "anti's" proposed a National Gambling Impact Study, as a political ploy. In the most spectacular piece of lobbying I have ever seen, Fahrenkopf helped get the following four appointed to the nine-member Study Commission: the C.E.O. of the largest hotel-casino in Las Vegas, the former Chairman of the Nevada Gaming Control Board, the President of the Las Vegas casino workers' union, and a member of a tribe which wanted to open a casino. Other legal gaming did not have lobbyists. So, the Final Report was particularly hard on state lotteries, convenience gambling and Internet gaming. The roles of lawyers, consultants, experts and lobbyists sometimes overlap. One way they all aid their clients is to analyze proposals before they become laws. The State Legislature of New Mexico once asked me to testify on the legal impact of an initiative that had just been approved by the voters. They were quite surprised when I told them that they had just accidentally given a state constitutional right to everyone to operate slot machines. Fortunately, the initiative had so many other defects that it was later declared invalid by the State Supreme Court. When the Hawaii State Legislature was considering legalizing a casino on the Big Island, I testified as an expert witness before the House of Representative's Finance Committee. The issue was whether native Hawaiians were Indians under the Indian Gaming Regulatory Act. The company that paid for my trip was working to get casinos, and was stymied because the State Attorney General had said that if the bill passed, there would be Indian casinos all over the state. I testified that, no, Native Hawaiians are not Indians under IGRA, for both historical and legal reasons. I don't consider myself a lobbyist. My testimony would have been exactly the same, regardless of who paid my expenses. But the group advocating a private casino for Hawaii would not have arranged for me to testify if my position had been the opposite.

Gambling and the Law: In defense of lobbysts is republished from Online.CasinoCity.com.