Casino magnate Sheldon Adelson, waging a new campaign to ban Internet gambling, is deploying a state-level political network he has been quietly developing over the past few years.
Adelson became a political force in 2012 when he poured more than $90 million into Republican presidential campaigns.
But less noted at the time was Adelson's largesse in Florida, where he contributed hundreds of thousands of dollars to political committees supportive of Republican Gov. Rick Scott. Adelson also gave $2 million to the Republican Governors Association and directed millions more to candidates for attorney general and other state-level offices across the country.
Many of the beneficiaries of Adelson's state donations are now siding with the billionaire as he seeks to outlaw a practice he views as a threat to the economic health of the casino industry on which he built a personal fortune.
Scott, for instance, who is facing a competitive re-election campaign this year, sent a letter late last month to congressional leaders at Adelson's request calling on lawmakers to prevent states from legalizing Internet betting, saying the practice lets gambling "invade the homes of every American family, and be piped in to our dens, living rooms, workplaces and even our kids bedrooms and dorm rooms."
The efforts by Adelson, who has vowed to play a big role in boosting another Republican for the White House in 2016, reveal the unusual role being played by the GOP mega-donor as he balances a largely conservative ideological agenda with his business interests.
The expanding debate has prompted Adelson to add Democrats to his orbit of influence.
In recent months, he hired two well-connected California Democrats -- former state House Speaker Fabian Nunez and longtime party strategist Chris Lehane -- as he combats legislation in Sacramento that would legalize Internet gambling. They join other prominent Democrats on Adelson's payroll, including former Sen. Blanche Lincoln of Arkansas and former Denver Mayor Wellington Webb.
The bipartisan coalition is designed to help Adelson, who controls the Las Vegas Sands Corp., combat a push by rivals such as MGM and Caesars to sell state legislators and governors on the expansion of gambling online as a potentially lucrative source of tax revenue. Adelson and his team are shaping an aggressive counteroffensive, with television ads and high-priced lobbyists, to argue that Web-based gambling would hurt children, invite criminal activity and produce little actual revenue for the states.
Adelson is "playing three levels of chess," Lehane said in an email, including "mapping the terrain to determine who are the key players; assembling the right team that is purple in terms of overall blend; and focused on the disciplined bi-partisan/non-partisan message of kids safety."
The letter sent last month by Scott was a blow to Internet gambling proponents, who see Florida as a potentially large market for the industry and had begun talks with some lawmakers about pushing legislation in Tallahassee.
But Adelson, who has expressed interest in opening a large casino in Miami, forged a rapport with Scott.
Between 2010 and 2012, Adelson contributed $750,000 to committees supporting Scott and his political agenda, according to Florida campaign finance records. That included a $250,000 contribution to the Republican Governors Association PAC in Florida, made in September 2010, just prior to Scott's election, and two additional $250,000 contributions in June 2012 -- one to the Republican Party of Florida and the other to Let's Get to Work, Scott's independent political action committee.
A spokesman for Scott declined to comment on his relationship with Adelson.
The same phrasing used in Scott's letter had appeared word for word in letters signed a few weeks earlier by two other Republican governors, Nikki Haley of South Carolina and Rick Perry of Texas.
In early February, Florida's attorney general, Pamela Jo Bondi, signed a letter with 15 other attorneys general warning of the consequences of Internet gambling -- "access by minors, fraud ... gambling addiction, and terrorist financing," all themes that Adelson and his staff talk about in their expanding campaign.
More support came 10 days later in a newspaper op-ed by Louisiana Gov. Bobby Jindal, who helped lead the Republican Governors Association when Adelson made his $2 million donation to the group.
Then, last week, Republican Gov. Mike Pence of Indiana formally expressed his opposition. Like Jindal and Rick Perry, Pence has received Adelson's financial support -- at least indirectly -- in the past. All three are contemplating running for president in 2016.
Legalization advocates, who argue that technological safeguards can protect children and ensure an above-board industry, have established their own well-funded organization in Washington, the Coalition for Consumer and Online Protection. The group hired former House Financial Services chairman Michael Oxley, R-Ohio, and retained former Obama campaign manager Jim Messina as consultants. One offshore betting site, PokerStars, has hired former House Democratic leader Dick Gephardt of Missouri to lobby.
Three states -- New Jersey, Nevada and Delaware -- have already authorized online betting.
Casino executives generally applauded in April 2011 when the Justice Department cracked down on the online poker market, closing three offshore sites for allegedly violating the 2006 Unlawful Internet Gambling Enforcement Act.
More recently, though, amid a decline in revenue for U.S. casinos and an increase in global interest in online betting, the old consensus among the leading casinos has crumbled.
But the 80-year-old Adelson is single-handedly funding the opposition, both by hiring lobbyists and tapping into political relationships forged through time and donations.
The federal legislation to effectively ban Internet gambling is being sponsored by an Adelson beneficiary, Sen. Lindsey Graham, R-S.C.
Graham raised nearly $31,000 since 2009 from Adelson family members and Las Vegas Sands employees, according to a review of Federal Election Commission records. Adelson and his wife also hosted a fundraiser in Las Vegas last year for Graham.
The measure, introduced in March by Graham, had in fact been initially drafted by a Las Vegas Sands attorney, Darryl Nirenberg, then with the Washington firm of Patton Boggs.
A Graham aide said the Adelson-connected donations are a tiny fraction of the more than $11 million the senator has so-far raised for the 2014 campaign and noted that it is common for lobbyists to suggest legislative language to lawmakers. Graham, in a recent appearance rejected the idea that he came to this issue this election year because of Adelson.
"I would say that Sheldon has allied himself with most Baptists in South Carolina," Graham said recently. "The fact that Sheldon is on board is a good thing -- but I am doing this because this is what my governor, my attorney general, suggested I do."
Adelson is also expanding his network to include influential religious groups whose constituencies tend to be anti-gambling.
His coalition now includes about a dozen state chapters of the Faith and Freedom Coalition, a national alliance of Christian conservatives headed by Ralph Reed, the former executive director of the Christian Coalition.
Adelson has hired two former Faith and Freedom officials, including Gary Marx, a former executive director of the organization. Marx helped build support for legislation that would outlaw Internet gambling.
Much of Adelson's focus is in state capitals, where his team is showcasing bipartisan bona fides not traditionally associated with the work of a GOP billionaire.
In Lehane, the California-based Democratic strategist, Adelson has hired a pugnacious advocate with deep ties to Bill and Hillary Clinton and other high-level Democrats across the country. As a staff member in the Clinton White House, Lehane authored a famous dossier laying out the "vast right-wing conspiracy" that had mobilized to undermine the administration.
Lehane, who calls the expanding coalition of Adelson advisers "the ideological equivalent of the Village People," a reference to the eclectic 1970s disco band, said he would likely be active in several states. That could include New York, where Internet gambling is on the agenda and where Lehane has a long-time relationship with Democratic Gov. Andrew Cuomo.
Information for this article was contributed by Alice Crites of The Washington Post.
A Section on 05/08/2014