Old Sixty Votes folds again; Butera’s blunder

Hey, Harry Reid, the casino industry called. It wants its money back. In all-too-predictable collapse, Old Sixty Votes threw in the towel on efforts to explicitly legalize online poker in the U.S. Since the issue is now dead for two years — and probably longer — there will be plenty of time for recriminations between Reid, squabbling casino companies and the American Gaming Association, all of whom frittered way an entire Congress and a 60-seat Democratic majority because they couldn’t agree amongst themselves on the issue until it was too late to get anything done. Don’t fret, guys; there’ll be sufficient opprobrium to go around.

There’s also a lot of money left on the table in the aftermath of Sixty Votes’ latest capitulation. J.P. Morgan has crunched the numbers and reports that what was a $1.5 billion industry two years ago will swell to between $3.5 billion and $5 billion by 2015 (which would have meant no more than $1 billion “rake” for the states and Uncle Sam). Given their existing player databases and online infrastructure, JPM liked Caesars Entertainment, MGM Resorts International and Station Casinos‘ chances to capitalize on this potential new market. In five years, that could mean as much as $875 million to $1.25 billion in additional cash flow. Not coincidentally, those companies are the three largest industry donors — not counting Mike Ensign‘s defunct Mandalay Gaming Group — to Old Sixty Votes’ war chest.

Grumpy old men. Victory goes to a handful of House members who’ve been wringing their hands over “a Federal right to gamble that has never existed in our country’s history.” Horrors! God forbid Americans should start thinking they have a “right” to spend their money in a casino. Come to think of it, the Founding Fathers didn’t think women or 18-year-olds should have the vote — and relegated black people to continued slavery. Then again, some present members of Congress would be perfectly content to live in 1787 America, where casting ballots was the exclusive province of white men of property. But I digress …

The Dec. 1 letter of protest from three GOP congressmen (Reps. Spencer Bachus [left], Dave Camp and Lamar Smith) is a steaming pile of horse manure, even by Beltway standards. It claims the House of Representatives voted overwhelmingly in 2006 “to prohibit gambling online.” (Emphasis in original.) It did no such thing. It voted for a port-security act bill onto which then-Rep. James Leach (R-IA) attached the Unlawful Internet Gambling Enforcement Act like a Yugo upon the trailer hitch of a Winnebago. It was, in fact, the very same manner of “secretive, closed-door, undemocratic process” about which Messrs. Bachus, Camp & Smith are now squealing like stuck pigs. Incidentally, neither Camp ($198,642) nor Bachus ($5,000) nor Smith ($9,500) has shied away from casino industry donations in the past.

Perhaps realizing that they are drawing to a weak hand, the holier-than-thou trinity then starts singing from the James Dobson hymnal. “Congress should not take advantage of the young, the weak, the vulnerable,” they piously intoned. “Considering that the social and economic harm done to America’s families and to young people from unlawful Internet gambling is well-documented, we ask: is addicting the Federal government to Internet gambling taxes really worth it?” (Actually, almost three-fourths of the 20% tax rate would have set aside for individual states.) Never mind that Reid had flung gambling opponents a massive concession by taking UIGEA a step farther and explicitly banning all non-poker games. It’s right there on page 23 of the 157-page bill, now a taxpayer-funded doorstop.

Offshore operators would have been grandfathered in under the Reid bill if had they sold themselves to say, an International Game Technologies or a Churchill Downs. That also would have been a quick-and-dirty way for U.S. companies to enter the fray without having to cobble together their own Internet-wagering apparatus. Economic stimulus! Wall Street would have like the prospect of all that merger-and-acquisition activity as tribes, casinos, slot manufactures and parimutels scrambled to get their piece of the action.

Holy hypocrisy! In a post-election e-mail, I. Nelson Rose informs me that Nevada senatorial aspirant and all-around loose cannon Sharron Angle was accepting assistance in the form of anti-Reid ads run by Gary Bauer‘s anti-casino PAC, a story that briefly got local play. While taking the prim Bauer’s help with one hand, Angle was stuffing at least $3,000 in casino industry donations into her purse the other (probably more, if money Sheldon Adelson snuck through a PAC is counted). Mind you, Angle could teach advanced courses in Situational Ethics, such as “How I Disparagingly Spurned Casino Money During the Primary but Took it During the General Election ‘Cuz I Suddenly Needed it.” Hey, running for office ain’t cheap when you’re spending $97 per vote. That $3K casino largesse bought Angle 31 big votes on Election Day … 30.9 to be pedantic, but we’ll spot her the extra tenth of a ballot.

Whoops! Back when he was still running Tropicana Entertainment as an offshoot of Columbia Sussex, then-CEO Scott Butera nixed a sale of Horizon Casino Vicksburg, presumably to prevent ColSux CEO William J. Yung III from dissipating all the company’s assets. (Casino Aztar in Indiana was also on the block before Butera interdicted that transaction, too.) Now Butera’s off to extricate Foxwoods Casino Resorts from a colossal financial mess and new TropEnt owner Carl Icahn has been shopping Horizon Vicksburg around.

Uncle Carl found an obscure buyer (South Carolina-based Gateway Casinos) willing to relieve him of the Mississippi riverboat for the princely sum of — get this — $3.25 million, plus debt. The best an Icahn spokesman could say for the price was that it was “amenable.” It’s also less than 10% of what Yung was able to obtain for the casino-hotel before Butera queered the deal. I cannot recall offhand an instance of a casino changing hands for such a pittance. It’s staggering.