Sheldon Adelson Looks To Harry Reid For A Big Favor

12/06/2014 07:30 am ET | Updated Dec 10, 2014

WASHINGTON -- Billionaire casino magnate and GOP sugar daddy Sheldon Adelson wants a big favor from Capitol Hill, and he’s looking to the top Democrat in Congress, Senate Majority Leader Harry Reid, to help him.

Adelson, the chairman of Las Vegas Sands Corp., is best known for spending tens of millions of dollars in recent years to help elect Republicans, largely through super PACs and “dark money” groups. It’s not a stretch to say that he is partly responsible for the fact that come January, Reid will surrender the majority leader’s gavel to a Republican, Kentucky Sen. Mitch McConnell.

For the next few weeks, however, Reid is Adelson’s best hope for accomplishing one of the billionaire’s top goals: to prohibit online gambling anywhere in the United States. The question is why would the Senate’s top Democrat, known for railing against the influence of conservative billionaires in American politics, be willing to stick his neck out for Adelson.

The answer lies back home in Nevada, where in two years Reid will run for re-election in what is already shaping up to be a tough battle. As a powerful figure in Nevada politics with money to burn, Adelson could do a lot to back Reid's opponent -- or not.

But first, Adelson wants the Democrat to help close a loophole in federal law that allows the states to operate and regulate online gambling. Thus far, New York, Delaware, Nevada and New Jersey have adopted some form of Internet gambling, with a half-dozen other states weighing similar measures. Adelson, whose billions come from his empire of brick-and-mortar casinos, wants to ban online gambling in the U.S.

On Capitol Hill, his crusade against Internet gambling has split the powerful casino lobby in two, with Adelson on one side and just about everyone else on the other. For major companies like MGM Grand and Caesar’s Entertainment, online gaming looks like a new source of revenue to help them weather a major downturn in the casino industry.

But Adelson doesn't see it that way. He has bankrolled a group called the Coalition to Stop Internet Gambling and hired powerful lobbyists like former Arkansas Sen. Blanche Lincoln (D) and former New York Gov. George Pataki (R) to press Congress for a ban. Adelson has also brought conservative Christian groups into the coalition, including branches of Ralph Reed's Faith and Freedom Coalition, the same group that took millions of dollars from disgraced lobbyist Jack Abramoff's casino clients in exchange for mobilizing opposition to gambling.

In the spring of 2014, the Coalition to Stop Internet Gambling scored a victory when Adelson's usual allies, the Republicans, introduced the Restore America’s Wire Act, a bill that would amount to a federal ban on Internet gaming. But then a surge in conservative opposition to RAWA culminated in last month's cancellation of a House Judiciary Committee hearing on the bill.

Below is a typical ad from the Adelson-backed coalition, emphasizing the dangers of online gambling to families.

If RAWA isn’t enshrined into law before Dec. 31, it will need to be reintroduced when the newly elected Congress convenes in January, a delay that would give its powerful opponents, which include both many major casinos and the Fraternal Order of Police, more time to marshal their forces. This is where Reid comes in.

In order to avoid a government shutdown, Congress needs to pass an omnibus spending bill, bundling many separate appropriations measures, before Dec. 11. Given the size and complexity of omnibus bills, they are typically crafted behind closed doors by congressional leaders, who often engage in horse-trading over pet projects until the very last minute. This kind of process is perfect for moving Adelson's online gaming ban.

In recent weeks, his army of pro-RAWA lobbyists fanned out across Capitol Hill offices, including those of the two lawmakers with the greatest influence over the omnibus bill: Reid and his House counterpart, Speaker John Boehner (R-Ohio).

“I know [Reid and Boehner] have had some discussions to some degree about when legislation could move and the need to address the issue,” Adelson’s chief lobbyist, Andy Abboud, told the industry journal Gambling Compliance in mid-November. “It’s just not clear as to when the timing will be."

Reid is usually a reliable backer of the casino industry as a whole, critical as it is to his home state's economy. But last week, he told Gambling Compliance that he was still deciding whether to take action on RAWA before the end of the year. “We’ll have to see,” Reid said, noting that he had “talked to [RAWA sponsor Sen.] Lindsey Graham and others” about his options. “We’ll have to see what the House does,” Reid said.

The fate of the online gambling ban could serve as a barometer of how much Reid is willing to do to help out one wealthy businessman, even over the objections of other powerful Nevada interests.

Should RAWA be inserted into the omnibus spending bill, it would bolster suspicions on Capitol Hill that the fiery Democratic leader and the conservative billionaire have struck a bargain to help one another -- specifically, that Reid will help Adelson accomplish his priority in Congress, and in exchange, Adelson won't spend his money to bolster Reid's opponent in 2016. Reid is likely to face Nevada’s Republican governor, Brian Sandoval, who was re-elected in November by a margin of more than 20 percentage points.

Many in Washington did a double take earlier this year when Reid defended Adelson on national TV. Speaking in May about the millions of dollars Adelson had spent building support for RAWA at the state level, Reid told MSNBC, "I know Sheldon Adelson. He's not in this for money; he's in this because he's got certain ideological views. Don't pick on [Adelson]. He's not in it to make money.”

Representatives for Reid and Adelson declined to comment on whether their bosses had a political truce. But in an interview last month with Nevada political journalist Jon Ralston, Abboud went out of his way to characterize Reid and Adelson's relationship as a warm one -- and RAWA as a done deal.

"Mr. Adelson and Senator Reid have a very genuine friendship," Abboud told Ralston. As for RAWA's prospects, he was supremely confident. "The die is cast on this," Abboud said. “The cake is baked.”

If true, that should please Adelson. The casino magnate has made billions of dollars from gambling over his lifetime, and he could make billions more if he manages to quash the competition in cyberspace.

In return for an online gaming ban, it's probably unrealistic to imagine that Adelson would publicly back a Democrat like Reid for re-election. But it's not a stretch to imagine a repeat of 2010, when the billionaire donated just $2,400 to Reid's Republican challenger, Sharron Angle, whom Reid defeated handily.

If Sandoval runs for Reid's seat in two years, Adelson could be forced to choose between two lawmakers he likes: the popular governor, whose PAC received $300,000 in contributions from Adelson in late October of this year, and Reid, the sitting senator who may have one big chance left to show Adelson that he has the billionaire's back.

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