Reid to sneak online poker legalization into tax deal? Update: Reid retreats

Harry Reid must be a political opportunist — excuse me, optimist.  Where others see defeat, Reid sees a chance to win a hand or two for his casino backers in Nevada.  Politico reports that Reid will attempt to attach a rider onto the Senate version of the tax deal reached by Barack Obama and Republicans on Capitol Hill to legalize online poker in the US, with provisions that give gaming corporations a big head start:

Senate Majority Leader Harry Reid is trying to use the tax cut package President Barack Obama brokered with Republicans to legalize online poker, POLITICO has learned — a move that could further complicate the deal Obama announced Monday.

Already, the online poker proposal has exposed the Nevada Democrat to charges of flip-flopping on a controversial issue, as well as using his Senate leadership position to repay big casino interests that helped him win reelection in a hard-fought campaign against Republican Sharron Angle last month.

No! I’m shocked, I tell you, shocked to find gambling in the Harry Reid Casino.  After all, Caesar’s Entertainment Group (formerly Harrah’s) and MGM Resorts pushed over a quarter-million dollars directly into Reid’s campaign.   They put another $375,000 into Patriot Majority, which attacked Sharron Angle with over $3.3 million in outside ads.

The proposal itself is nothing more than old-fashioned corporate welfare for casinos in Nevada and New Jersey, too:

The National Indian Gaming Association is opposing Reid’s effort to insert the online poker language in any tax cut bill, said an official with the group, Jason Giles. He asserted it gives an advantage to Las Vegas-based gambling operators while discriminating against tribal operators.

“It is drafted to create an initial regulatory monopoly for Nevada and New Jersey for the first several years of the bill, which gives Las Vegas operators time to capture the market,” he said.

In previous proposals, the legalization would only apply to select companies in a years-long trial run, ostensibly to test whether legalization creates problems in the US.  The real purpose of conducting the “trial run” is to give a big head start to established companies, eliminating the chance that others could compete for the business.  Those restrictions in previous versions heavily favored the Nevada-New Jersey gaming industry, while locking out smaller players (such as the Indian casinos).

It’s no secret that Reid has a big tab with the casinos that rescued him from the Republican tidal wave.  However, he’s going to have a tough time selling the notion that the biggest priority in the lame duck session is to legalize online poker rather than deal with the budget, which is still far from complete, or that poker legalization belongs in the same bill as the tax deal.  Regardless of the merits of the concept of legalization (which I wouldn’t oppose), both the corporate welfare and the timing of this proposal should sink it in the remaining session of Congress.

Update: Looks like Harrah Reid was attempting to draw three to an inside straight:

Rest easy, traditionalists: online poker will not be entering the legally authorized gaming arena this lame duck Congress, and that probably means it won’t be happening any time soon.

Senate Majority Leader Harry Reid told the Las Vegas Sun after a press conference this afternoon that despite a flurry of last-minute lobbying, he would not be adding legalization of online poker to his list of objectives during the lame duck.

“We’re still working on that, we’re not able to,” Reid said.

No worries; Reid will still be dealing the hands in the next session of the Senate, and eventually the house always wins.  Except, in this case, if the House wins.