GOP Declines To Ban Online Gaming For Sheldon Adelson — Is The Allure Of Cronyism Fading?

Jerry Rogers Founder, Six Degrees Project
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The media headlines over this past weekend tell us that the great retail tradition of Black Friday continues, but only as a shell of its former self. With the rise of online shopping, Black Friday has lost much of its allure. Could the rise of a different online activity — internet gambling — cause the downfall of yet another, albeit corrupt, American tradition: crony capitalism?

With escalating opposition from conservatives, one of the most blatant attempts at cronyism introduced this Congress was denied a hearing in the lame-duck session. The denial was unexpected and abrupt. Just a couple of weeks ago most Washington insiders believed that a hearing of the Restoration of America’s Wire Act (RAWA) was a sure bet and a vote in the House was likely.

Immediately after the November elections, a buzz began to swirl on Capitol Hill that the House Judiciary Committee would consider Sheldon Adelson’s internet gambling ban (otherwise known as RAWA). With a flurry of activity by Adelson’s Coalition to Stop Internet Gambling (CSIG), all expectations pointed to an early December committee hearing. Capitol Hill aides were confirming that the GOP majority would give RAWA a hearing, and CSIG was lobbying for a vote by the full House before the lame-duck’s adjournment.

CSIG obviously believed that the December hearing was imminent as it booked former Democratic Senator turned influence-peddler Blanche Lincoln on Mike Huckabee’s Fox News program. Ms. Lincoln is a lobbyist (and a CSIG spokesperson) retained by Sheldon Adelson’s Las Vegas Sands corporation. The audacity here is astonishing, even by Washington standards. The man who has made billions on casino gambling wanted to rally anti-gambling social conservatives to support his crony legislation. However, Ms. Lincoln’s best attempt to play Jonathan “the people are stupid” Gruber fell flat. Even with soft-ball questions lobbed from a friendly host, Lincoln’s appearance was full of gaffes and misstatements.

Three states — Nevada, New Jersey, and Delaware — have legalized online gaming and a dozen more states are looking to do the same. Seeing the trend, Sheldon Adelson tried — unsuccessfully — to build an online gambling business. Adelson failed to capitalize on the market, and now he wants the government to criminalize his potential competition. RAWA was drafted by a Sands’ attorney, and Mr. Adelson has been engaged in an all-out campaign promising to spend “whatever it takes” to get the bill passed. Adelson seemed poised for a major legislative victory.

Perhaps what Adelson didn’t expect — given his super-donor status in the GOP — is a coalition of conservative organizations staying the course in strong opposition to his crony power play. This group — led by Americans for Tax Reform — sent a November letter to Congressional leadership making clear that RAWA is an assault on federalism and states’ rights.

The GOP has railed against President Obama’s corporate bailouts and green energy kickbacks. But Republicans have supported their share of crony proposals, including the Adelson bill. Even after sweeping Republican victories this November and as Republicans prepare to take complete control of Congress, a clear majority of Americans — 74 percent — says the midterm results were a repudiation of Democrats, not a Republican mandate. The CNN poll released Monday shows that the American people are uneasy with the incoming Republican majority. However, if the GOP’s rejection of RAWA is an indication of how Republicans will govern in the new majority, public skepticism will turn to support.

With RAWA being denied a hearing, cronyism fatigue might be finally setting in. If so, Republicans can get to fixing what is broken with our economy, and get the government out of the business of picking corporate winners and losers. Sheldon Adelson has invested a great portion of his wealth seeking Republican victories. However, it might be in defeat where Adelson sees the greatest return on his investment. By shunning crony capitalism and promoting free enterprise the GOP could build a lasting, conservative governing majority. If so, conservatives will owe Sheldon Adelson a debt of gratitude.