Gaming Industry Raises Stakes on Foes

Upping the ante against opponents of casino expansion, gambling industry lobbyists are betting that influential friends in Washington will reverse the industry’s run of bad luck in the states.

With their nationwide expansion apparently stalled after two decades of phenomenal growth, gambling concerns have banded together to establish the American Gaming Assn. The head of the year-old lobbying group is Frank J. Fahrenkopf Jr., a former National Republican Party chairman.

Fahrenkopf, a lawyer and political deal-maker, is plugged in with both political leaders in Washington and gambling’s key figures in his native Nevada. From his perch at the head of the AGA, he is expected to cash in his chips with other Washington insiders on behalf of such heavyweight hotel-casino operators as Hilton, ITT, Circus Circus and MGM Grand.

“The gaming industry was one of the few major industries that was not at all represented in Washington,” Fahrenkopf said. “Every industry from automobiles to pasta companies is represented with a lobbyist or law office. . . . We’re just keeping up with the times and the growth of our industry.”

Critics credit the AGA with strangling a congressional proposal to create a commission that would study gambling’s impact on surrounding communities.

“I am concerned that the gambling industry is attempting to buy off Washington’s leaders,” said Bernie Horn, political director of the National Coalition Against Legalized Gambling.

In a study released late last month, the Center for Public Integrity, a Washington watchdog group, said gambling interests had contributed $4.5 million to political parties and candidates at the federal level since 1991. Of that, $1.4 million went to Republican Party committees and $1.2 million to Democratic Party committees.

“The gambling industry has moved quickly to accumulate influence and clout in national politics,” said Meredith O’Brien, the report’s author. “When it speaks, politicians listen.”

Fahrenkopf says the industry is doing nothing to cause alarm. He notes that legalized gambling is operated by well-scrutinized, publicly traded firms that, just like any other “good corporate citizen,” want their lobbying arm to protect their political interests.

Twenty years ago, only Nevada allowed casino gambling and only 13 states permitted lotteries. Since then, as casinos sparked jobs and tax revenues for Atlantic City, N.J., and the number of states with lotteries doubled, other financially pressed communities set aside their puritanical instincts to embrace the good life promised by gambling. During the boom years from 1988 to 1994, 21 states legalized casinos and 10 states legalized slot machines or video poker.

Americans placed about $17 billion in legal bets in 1974. By 1994, wagering had grown to $482 billion.

But over the last two years, anti-gambling forces have won 34 of 36 statewide ballot initiatives involving legalization. Horn says the industry is worried it will suffer similar reversals at the national level. “The gambling industry has only one political asset, and that is money,” Horn said. “What they lack is public support. . . . What they couldn’t do at the ballot box, they’re now trying to do by buying politicians in Washington.”

Ralph Reed, president of the Christian Coalition and a staunch opponent of legalized gambling, predicts the campaign would fail.

“You can’t just swoop into Washington with a lot of money and have your favorite senator or congressman attach an amendment in the dark of night to a piece of legislation,” he said. “There are too many people--in the media and, more importantly, in grass-roots groups with sophisticated lobbyists in Washington--to get away with that kind of thing anymore.”

At immediate issue is legislation to create a gambling commission to study such volatile questions as whether the industry tries to entice pathological and underage gamblers to its tables.

The House has passed a bill setting up a commission with full authority to subpoena gambling industry records. In the Senate, the Governmental Affairs Committee has approved a commission that could subpoena specific documents but not use its authority to go on a fishing expedition.

The bill has yet to be scheduled for Senate floor debate. Sources say it was caught in the switch when Sen. Trent Lott (R-Miss.) took over as majority leader last month after Bob Dole retired to devote full time to his presidential campaign.

Lott said recently that he intends to bring the bill to a vote shortly after the Senate’s July 4 recess, which ended Monday. Previously, he had said he was pleased that the governmental affairs panel had “scaled back” the commission’s subpoena powers.

Fahrenkopf said the industry actually favored the creation of a commission--but one that did not have broad subpoena power.