Affiliate News Analysis: The Reid Internet Gambling Plan

Harry Reid’s last-minute plan to legalize and regulate Internet gambling in the U.S., announced only last week, was always a long shot. Now it’s even longer: The Senator had to drop the proposal from the big tax bill that’s currently the focus of Congress.

So what now? “At this point, the only vehicle I see is the omnibus,” Senator John Ensign said on Monday, per the Las Vegas Sun’s Karoun Demirjian, who adds: “because the gambling legalization measure is a revenue-generator, it could be attached to the federal budget.”

Even though a major gambling analyst now puts its odds of success at less than 10 percent, the idea isn’t completely dead. It’s picked up some big political support from the American Gaming Association, according to ABC News. But that’s probably not enough to get it pushed through in the next few weeks, before the power balance of Congress shifts for the next two years.

“On Jan. 5, 2011, the new Congress gets sworn in, and the House comes under Republican rule for the next two years, rendering any measure to legalize online poker from that point forward effectively dead on arrival,” Demirjian grimly reminds us. (But Polito also informs us that lawmakers’ll be working overtime ‘til the end of the year.)

The Affiliate Angle: CAP Commentary

At any rate, would the bill really be good for the Internet poker industry as we know it? After all, it was created “to make sure that the first licenses would be granted to casinos in states with large and ‘established’ regulatory programs overseeing more than $2 billion in gambling revenue, guaranteeing that big Las Vegas casino companies would have a leg up over potential competitors, especially Indian tribes in other states,” according to MSNBC.

No surprise: Some of Reid’s biggest supporters in his election win last month were big casinos like Harrah’s (Caesars Entertainment).

So, the bill’s goal to favor Vegas companies — like similar proposals in states like New Jersey and California — is likely to damage some poker affiliates relying on established international brands like PokerStars and Full Tilt Poker, whose fate would be completely uncertain under the new proposed law.