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Hedging the bet

National | Las Vegas lobbies hard to weaken federal probe of gaming

Issue: "Dole: Looking for a VP," May 25, 1996

Casinos make no guarantees. That's why it's called gambling. But the professional gamblers of Las Vegas have no interest in gambling in Washington: They want a sure thing. So when House Speaker Newt Gingrich appeared April 29 at a $70,000 fundraising breakfast for a first-term Nevada Republican and announced his support for weakening a Washington probe of the gaming industry, the Las Vegas high rollers must've thought they'd hit the jackpot.

The night before, Mr. Gingrich dined with big-time Republican donor Steve Wynn, chairman of the board of Mirage Resorts, a gambling concern in Las Vegas. The next morning, as the Speaker stumped for Rep. John Ensign (R-Nev.), he discussed pending legislation that would create a federal gambling commission and said he would oppose a provision in the bill that would give the panel the power to subpoena industry documents. Mr. Gingrich, according to a Washington Post account, said the panel should have to get the full approval of Congress to issue a subpoena-an unwieldy and unlikely procedure.

The nation's gaming industry made over $40 billion last year in 48 states where some games of chance are, in some form, legal. The industry is funneling more and more money into lobbying both sides of the congressional aisle, a fact that thoroughly frustrates Republican congressman Frank Wolf of Virginia, the principal sponsor of the House bill to create the new panel to explore the industry's rapid growth.

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"Frankly, I think the Republican Party is making a drastic mistake in taking money from the gambling industry," Rep. Wolf told WORLD. "If a candidate takes it, I guess the candidate can rationalize that the gambling industry is giving it to him because they like his position on [gambling].... But the Republican Party represents all of us.... If this bill does not pass, or if a weakened bill passes, the American people ought to rise up.... Our party I believe honestly and truly is a pro-family party, and therefore we ought to be pro-family [concerning the gambling issue]."

Rep. Wolf's bill passed the House last month, and after weeks of prolonged skirmishing, a similar version passed the Senate last week. Both versions of the bill propose creating the National Gambling Impact and Policy Commission "to conduct a comprehensive and objective study of the effects of gambling in America." At an estimated cost of $4 million, the new bipartisan nine-member commission would not regulate or tax gambling, but simply assess its growth and study its impact.

The last time a congressional commission was formed to study gambling on a national scale was from 1972 to 1976; at that point, only two states had legal gambling. Today, all but two states have some form of legal gambling; currently, 37 states have lotteries, and 23 states host casinos.

The industry's mainstreaming is readily evident: Former GOP chairman Frank Fahrenkopf now runs the American Gaming Association, the national gambling industry's top lobby, which has also hired the likes of lobbyist Ken Duberstein, a former deputy chief of staff in the Reagan White House and now an advisor to Colin Powell.

Such mainstreaming means that studying gambling's growth and strategies is all the more pressing, says Charles Morin, who chaired the previous Commission on the Review of the National Policy Toward Gambling in the mid-1970s. "Another in-depth study is certainly now called for, and I believe the results will be shocking," Mr. Morin said in a May 7 letter to Rep. Wolf. "The billions of dollars flowing across crap, roulette, and blackjack tables is not coming from people who can afford to lose."

Both Rep. Wolf and his Senate co-sponsor, Paul Simon (D-Ill.), say that without power to subpoena documents from gaming industry giants, any commission created to study the topic would be toothless, a view that Mr. Morin shares. "Obviously, such a commission is meaningless without this power," Mr. Morin said. "The 1972-76 commission had subpoena power and, because of that, we never had to use it-in other words, when you have the power you will get cooperation."

Those opposed to gambling claim that a close scrutiny of the industry's records will likely reveal deliberate strategies targeting weak individuals, much like the accusations being aimed at the tobacco industry. Mr. Morin says that the industry's avid resistance to granting a congressional committee simple subpoena powers "would seem to lead to the conclusion that [they]... do, in fact, have something to conceal."

Since Mr. Gingrich's Las Vegas comments, he has stayed mute on the subject; Rep. Wolf notes that the speaker in actuality was helpful in passing the initial house bill proposing the commission. "I think maybe the Speaker is taking a rap that isn't quite accurate," said Rep. Wolf. He predicts that a final bill containing necessary subpoena powers should pass both chambers by July 4.

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