The effort to legalize online poker will test Reid’s ability to deliver for his state. | AP Photos Harry Reid's Internet poker gamble

Senate Majority Leader Harry Reid was trying to brand fellow Nevada Sen. Dean Heller a failure earlier this month when he wrote that passing an online poker bill was “the most important issue facing Nevada since Yucca Mountain.”

Yet in doing so, Reid also elevated a controversial piece of legislation that is iffy at best to a defining element of his own legacy — as significant as ridding the state of a nuclear waste repository.


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The effort to legalize Web poker and ban all other forms of Internet gambling by year’s end is about to test Reid’s much-touted ability to deliver for his state. If he does not succeed, the fear is that the nation will see an explosion of unrestrained, unrestricted Internet gambling of all types that could badly cut down on gambling junkets to Las Vegas and cut into the state’s tourist revenue.

“We’re trusting that Harry knows what he’s doing,” a top casino company executive told POLITICO. “If he doesn’t, we are so screwed.”

The issue, which had simmered for much of this year as Democrat Reid negotiated a bill with Sen. Jon Kyl (R-Ariz.), exploded into an unusual intrastate, internecine battle between Reid and Heller, a Republican.

Reid had earlier this year tasked the Silver State’s junior senator with rounding up 15 GOP votes to push legalized online poker, but not other forms of Internet gambling, then lambasted Heller publicly last week for failing to do so.

Heller insisted he’s been making progress on his side of the aisle but countered that he, Reid and Kyl had all agreed the House should take action first on a bill — a claim Reid spokeswoman Kristen Orthman called “a bald-faced lie.” (The House is making no movement, and none of Nevada’s three members have initiated any legislation there despite Reid having declared this the state’s top legislative priority.)

“Let’s be clear, Sen. Reid has lived up to his part of the agreement and has the votes on his side in support of this bill,” Orthman said in an interview. “The premise of [this] question speaks more to the ineffectiveness of those tasked with whipping [up] the Republican votes. Time and again no one fights harder for Nevada than Sen. Reid, and he has the record to back it up.”

With Congress recessed until after the election, the bill now depends on the lame-duck session. Reid, observers say, is setting up Heller, who faces Reid’s protégé, Democratic Rep. Shelley Berkley, in November, to take the blame if 2012 ends with no bill at all.

“I don’t think anything’s going to get done, and when that happens, Reid’s got the perfect defense,” said Eric Herzik, chairman of the political science department at the University of Nevada, Reno. “He can say, ‘I did what I could. These crazy Republicans. They’re enemies of the state of Nevada.’”

The gaming industry has been on tenterhooks ever since the Department of Justice last December reinterpreted the Interstate Wire Act, concluding it only prohibits betting online on sports. Prior to that, the 1961 law had been seen as prohibiting all forms of betting online.

In the wake of that, more than a dozen state Legislatures began mulling over their own versions of legalized Web gambling. Delaware, for instance, will allow the sale of lottery tickets and video versions of various casino table games for residents early in 2013, and others, such as Illinois, New Jersey, Nevada, Minnesota and California, are looking at variations.

Most of the large casino companies, represented by the American Gaming Association, want Congress to ban betting on games of chance online but leave a carve-out for online poker which, they argue, is a game of skill.

The bill Reid and Kyl have worked on, a summary of which was leaked first to POLITICO earlier this month, is a classic D.C. compromise. Kyl has long opposed online gambling in any form, but Justice’s reinterpretation has made it imminent without regulation. Thus, he’s willing to help push through a measure that blocks most of it and leaves poker legal, which is what Reid wants because the casino industry fears online gambling could devastate brick-and-mortar properties.

The casinos don’t mind online poker because they make very little money off the game anyhow, as players compete with one another, not the house. Also, they view the Internet as a potential market for their brands.

“My personal view is that Internet gambling poses a real danger to our society,” Kyl said in an August interview. “And if one state doesn’t want it, it’s very nearly impossible to stop if it’s on the Internet.”

Still, Kyl and Heller say it has been challenging to persuade conservative Republicans to vote for anything that can be seen as legalizing any form of gambling, even if the alternative could be a dizzying spread.

That bolsters Reid’s position that the GOP is in the way and Heller hasn’t been persuasive, but there’s significant risk to Reid, too, in ratcheting up the matter. In his Sept. 11 letter to Heller, he declared passage of a federal poker legalization bill “the most important issue facing Nevada since Yucca Mountain,” hyperbole that hands Republicans an opportunity to deny Reid a home-state victory he has now placed in the same orbit as his most important achievements.

“It’s absurd,” groaned Bill Thompson, a veteran gaming-industry researcher at the University of Nevada, Las Vegas. “Our schools are going broke, our university’s budgets have disappeared, we have the highest foreclosure rate. It’s totally absurd that online poker is the most important priority.”

If landing this bill is at that level, his critics charge, then what does it say of his leadership that the matter is going down to the wire at all?

“What happened was Reid, for political expediency, decided to blow this thing apart,” said an aide to Senate Minority Leader Mitch McConnell (R-Ky.). “Sen. Reid was the majority leader with a 60-vote majority for two years and couldn’t get this done. Now he wants to blame it on a freshman in the minority. It says a lot about him and it says a lot about his failure to do it.”

Orthman rejected such talk. “Legacy assumes this will never get done. Just because Sen. Heller can’t deliver the votes now doesn’t mean Sen. Reid will stop trying to get bipartisan support.”

Even conservative pundits in Nevada doubt Reid will be damaged much from this gambit. The attack on Heller is “laughable,” said Nevada News Bureau Editor Elizabeth Crum, “but of course, Reid is going to score political points in the meantime if he can. I don’t think there’s a lot of risk for Reid to do this.”

The casino industry outwardly remains confident Reid can pull it out, although antagonizing Republicans over this “seems like a strange way to do it,” the casino executive said. Still, his power remains so respected that nobody from the AGA, the Poker Players Alliance or Nevada’s largest casino corporations would go on the record for this report.

“The AGA has no comment on negotiations between individual members of Congress,” said Holly Wetzel, spokeswoman for the lobby.

Indeed, their bigger fear is that Reid gets bounced from leadership if the GOP captures the Senate, thereby having little to use to horse trade during the lame-duck session and no ability to drive the agenda of the next Congress.

And therein may be the brilliant bit of political strategy — reminding the gaming industry of why it’s important to keep him in his leadership role. That means helping Berkley defeat Heller — a move that would almost certainly keep the Senate in Democratic hands, Herzik noted.

“Reid can say, ‘Dean Heller’s not delivering the way a senator should,’” Herzik said. “For [the] average voter, this doesn’t come close to Yucca Mountain. For the gaming community? It’s bigger than Yucca Mountain.”