Wednesday, 28 September 2016 09:48
Faced with the impending retirement of Harry M. Reid, lobbyists for the casino industry are working aggressively to expand their influence beyond their most influential player on Capitol Hill.
The gambling industry’s leading trade group, the American Gaming Association, is spending hundreds of thousands of dollars on outreach to federal and local lawmakers across the country who they hope will champion gambling interests after Reid — the industry’s longtime advocate in Congress and Senate minority leader — retires in January. And executives at major casinos are flying to Washington more frequently to build relationships with congressional leaders.
“We’ve had a gift in Harry Reid,” said Jan Jones Blackhurst, executive vice president of government relations at Caesars, which operates casinos in 13 states. “Now we need to learn to be smart and fast on our own. All of us are acutely aware that the strong voice we always had representing the industry in Washington will be diminished.”
Jones Blackhurst is doubling the number of times she travels to Washington each year, from less than 10 trips to about 20 “just in relationship building” with lawmakers. She is focusing on members of the Congressional Hispanic Caucus, Congressional Black Caucus, the House Ways and Means Committee and leadership offices. Many CBC and CHC leaders represent states where Caesars does business, such as Reps. Elijah E. Cummings (D-Md.) and Bennie Thompson (D-Miss.) and Sen. Cory Booker (D-N.J.).
“You became so dependent on Sen. Reid, or comfortable as it were, you didn’t always build all the relationships with other states [where] we do business,” Jones Blackhurst said.
A former chairman of the Nevada Gaming Commission, Reid helped ease or shepherd many measures that helped casinos in his home state. Last year alone, for example, he supported language in a spending and tax bill that temporarily preserved tax loopholes benefiting the gambling and hotel industries, and backed a measure that would have given Caesars more leeway in restructuring debt to avoid bankruptcy.
“I have spent my career fighting for Nevadans, including the hundreds of thousands of Nevadans who work in the gaming industry,” Reid said through a spokesman. “I plan to do everything I can to keep fighting for the gaming industry and I have no doubt that the industry will continue to thrive.”
Casino lobbyists expect the rest of the Nevada delegation, especially Sen. Dean Heller (R), will continue advocating for their industry. But they are broadening their “champion-building” campaign to other states where gaming is newer.
AGA lobbyists, led by chief executive Geoff Freeman, have been crisscrossing the country for the past 18 months to build ties with state and federal lawmakers in targeted states where brick-and-mortar casinos are growing: Colorado, Michigan, Missouri, Mississippi, Iowa, Ohio and Pennsylvania.
The AGA’s focus is not just to get face time with members of Congress in their home districts, but also to cultivate relationships with local officials and industry leaders. While some of these tactics are not new, Reid’s retirement makes them more pressing.
Since early 2015, AGA officials, in partnership with state-level casino lobbyists and groups, have hosted or sponsored about 10 town halls, receptions and other events to drum up public and legislator awareness of the industry, using the events as a platform to tout the benefits of gaming, such as adding jobs and tax revenue to local economies. Recent ones have been held in or around Detroit, Denver, St. Louis, Philadelphia, Columbus and Kansas City.
The AGA is not endorsing either candidate in the Nevada Senate race to replace Reid. Freeman says he has met with both candidates — Rep. Joseph J. Heck (R-Nev.) and Democratic former state attorney general Catherine Cortez Masto — and considers them both “excellent individuals.”
The gambling industry’s involvement in politics has grown significantly over the past 20 years,according to the Center for Responsive Politics. In 2015, the industry spent $37 million lobbying federal lawmakers — the most it has ever spent in at least 17 years. Much of it was over the Restoration of America’s Wire Act, proposed legislation that would outlaw online gambling. Many leading casinos, including Caesars and MGM, support the regulation of Internet gambling, while Sheldon Adelson, the GOP mega-donor and chief executive of Las Vegas Sands, wants to ban it outright.
Legislation outlawing online gambling was introduced in 2014 and reintroduced in 2015, but never made it to the floor of either chamber.
Reid has received about $2 million from casinos and gambling interests over the course of his career, according to CRP. Three of his five biggest campaign contributors are casinos: MGM, Caesars and Station Casinos.
AGA’s move to boost its advocacy efforts is being funded in part by the group’s growing membership, particularly among tribal casino operators. Since Freeman took the reins in 2013, the group has increased its annual revenue from $9 million to $14 million, and is aiming to hit the $20 million mark in the next few years.
The AGA’s strategy notably sidesteps online gambling, an issue that has divided the gambling industry and garnered intense lobbying from supporters and detractors.
“That’s a complicated issue for us,” Freeman said. “Our members are not aligned on that. That’s why we’ve focused on issues where we do have alignment.”
By many accounts, Reid, a Democrat, maintains a complicated and delicate relationship with Adelson. Reid was receptive to Adelson’s campaign to ban Internet gambling — running counter to many casinos that want to legalize it. Adelson mainly gives to Republicans but Reid, nonetheless, defended him as unlike other wealthy political donors like the Koch brothers, who he believes engage in political activity to increase their personal fortunes. Of Adelson, Reid said in 2014 that “He’s not in it to make money.”
A representative for Las Vegas Sands did not return a request for comment.
Reid and Adelson appear to have come to a mutual understanding about their relationship. Reid recently told a Post reporter: “He and I have a relationship: I don’t denigrate him and he doesn’t denigrate me.”
The success of the AGA’s campaign will be a test of the group’s ability to adapt to changes the gambling industry has undergone since the AGA was founded in 1995 by former Republican National Committee chairman Frank Fahrenkopf, who retired from the AGA in 2013.
When Fahrenkopf formed the group 21 years ago, the casino industry was largely concentrated in Las Vegas and Atlantic City. Today, there are clusters of casinos in dozens of states and online gambling — which is regulated state by state — is prevalent. Nevada, New Jersey, Delaware and the U.S. Virgin Islands permit online gaming.
“Now that gaming is in 40 states across the country, support for gaming among members of Congress should reflect our vast footprint we have across the country,” said Troy Stremming, chief lobbyist for Pinnacle Entertainment, the Las Vegas-based company that operates casinos in Colorado, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada and Ohio.
Jones Blackhurst said Caesars is working together with industries that complement gambling, such as hospitality and tourism, to find allies and align strategy on some matters.
“I don’t think anyone is comfortable with losing Sen. Reid,” she said. “It’s going to take a lot of work. I think we have the right strategy. It’s going to take time … But to say we can have the same stroke we had when Harry Reid was our spokesperson and representative, it’s not possible.”