THE FIGHT: Christie Closer to the Edge as Reid Backs Away

This week, The Fight isn’t just about legislature and bills, lobbying and governors. We’ve got the return of everyone’s least favorite bank and a dose of bribery too. But let’s start with the legislative stuff.

New Jersey Gov. Chris Christie remains mum as to his plans for A-2578, New Jersey’s latest intrastate online gaming bill. One rumor currently making the rounds is that Christie may “conditionally” veto the bill, a process by which he would return it to the state legislature with proposed amendments. Christie himself has said only that he is carefully considering what to do.

State lawmakers and industry representatives ranging from John Pappas, executive director of the PPA, to Bob McDevitt, president of the state’s largest casino workers’ union, have met with the governor and urged him to sign the bill. Christie has until noon next Thursday to act. Don’t expect any news before then.

In the meantime, Iowa’s back in the fray. Jeff Danielson, an Iowa State Senator and supporter of online poker, introduced Senate Study Bill 1068 to the Iowa Senate late last week. The bill provides for intrastate online poker only, although it contains a provision allowing multi-state compacts to pool players with other states. SSB1068 also includes a “bad actor” clause that prohibits the state from licensing any internet gaming company that previously accepted bets in violation of the law.

Online poker is something of a pet issue for Danielson. He introduced online poker bill SSB1165 in 2011. That attempt never made it out of committee. Undaunted, Danielson tried again in 2012 with SSB3164 (later renamed Senate File 2275). That bill was passed by the Senate on a 29-20 vote in March but then stalled in committee in the House.

Danielson’s latest bill is similar in many ways to the 2012 bill. But with Nevada, Delaware and (potentially) New Jersey all authorizing online poker, and California, Mississippi and Hawaii all giving it a long look, the economic benefits of the bill – and the lobbying money from gaming organizations active in Iowa – may garner more support from Iowa lawmakers this time around.

Last but certainly not least is the strange tale coming out of Utah about Jeremy Johnson and U.S. Senate Majority Leader Harry Reid (D-NV). Johnson is the man who was at the center of the SunFirst Bank scheme by which Full Tilt allegedly processed U.S. poker payments, as detailed by the Department of Justice in the Black Friday indictments.

This week Johnson gave the Salt Lake City Tribune an audio tape of a meeting he had last year with Utah Attorney General John Swallow. On the tape, Johnson claims that in 2010 he paid a $1 million bribe from SunFirst Bank’s general reserve to a company connected to Reid, under instruction from executives at Full Tilt. They said it was needed to secure Reid’s support for a federal online poker bill.

Reid has vociferously denied Johnson’s claim, as you’d expect. It’s hard to know if there’s any truth to the allegation. Reid did make a surprising about-face on online poker in August 2010 after years of opposition. But at the time he was also locked in a bitter, tight election contest with Tea Party candidate Sharron Angle. Reid’s newfound love of online poker may simply have been a matter of appealing to Nevada’s big-money casino interests to encourage them to make campaign contributions – campaign contributions that Full Tilt, as a foreign entity, was prohibited by law from making.

Regardless, what seems certain now is that Reid will distance himself from online poker to avoid the appearance of any impropriety. Not pushing hard (or at all) for an online poker bill may make it appear less likely that Johnson’s tale is true. And in politics, appearance is quite important – something poker’s historically negative image has always struggled against.

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Kevin McGrady

Legislative and Politics Beat Writer: Kevin McGrady practiced corporate law in New York City for eight years before moving to Las Vegas in 2008 to join the gaming industry. Kevin is a graduate of New York University and Columbia University School of Law.
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