Clinton, Obama, and the Gaming Industry

Although the gaming industry has long been a major campaign contributor, this year's early Nevada caucuses hauled it into the political theater and flooded it with neon light. Sen. Barack Obama, who won the endorsement of the casino workers' union -- but not necessarily the votes -- was challenged to declare his support for gaming. To demonstrate her commitment to the industry, Senator Clinton assembled a Nevada Business Coalition comprised largely of casino CEOs and stakeholders.

Yet, given their records, it is unclear that either Obama or Clinton would substantially influence federal gaming policy as president. Clinton certainly has a long history and close ties to the industry. Obama has made public comments acknowledging the importance of gaming to many communities' economies. Nevertheless, both candidates' gestures toward the gaming industry have been largely symbolic and rhetorical -- which in the long run probably serves the industry just fine.

Clinton's history with gaming goes back at least to 1994, when President Bill Clinton suggested a 4 percent federal tax on all gaming receipts to help fund the administration's health care and welfare reforms. The idea did not get very far before 30 governors convinced the administration that the states depended on gaming revenue for their own budgets, and the administration dropped the idea. But it prompted commercial casinos to organize a political action committee to permanently represent their interests in Washington, DC.

The episode did not seem to inspire any hard feelings. On the contrary, it put the Clintons and the gaming industry on each other's radar. Frank Fahrenkopf, head of the American Gaming Association, notes that the Clintons retain close ties with many people in the industry, including the former governor of Nevada and the publisher of the Las Vegas Sun newspaper.

In her 2000 senate bid, Clinton expressed her general support for gaming, perhaps in light of the substantial tax revenue generated by the New York gaming industry, which includes casinos, racetracks, charitable gaming, and combination racetrack-casinos called "racinos." Her campaign received $17,475 in contributions credited to the gaming industry -- a modest sum compared to other senatorial campaigns.

As an elected official, Clinton had varied responses to issues related to American Indian gaming. In October 2005, she wrote in favor of the Akwesasne Mohawk Casino as part of an argument against the Western Hemisphere Travel Initiative, which would restrict movement across borders. One of the effects of the initiative, Clinton pointed out, would be to threaten the casino's significant Canadian customer base. Then, the following month, she spoke against a Shinnecock Nation proposal to build a gaming facility, arguing that it would create traffic congestion and have a negative environmental impact.,

In the case of a long-standing bid to build an American Indian gaming facility in the Catskill Mountains -- a drama that has been unfolding since before Clinton took office in 2001 -- she has left most of the controversy to the governor's and local representatives' offices. However, a few months ago her presidential campaign won the endorsement of the tribe's leader.

If Clinton has not left much of a public record related to the gaming industry, Obama, who received only $6,850 from the gaming industry in his 2004 Senate bid, has left even less. "When Barack was in the state senate, I worked for the Gaming Board and I didn't even know who he was," said Tom Swoik, a representative of the Illinois Gaming Commission. "He wasn't someone we were tracking."

Obama's most delible marks on the public record come from a Chicago Defender article from May 21, 2003, supporting the Illinois governor's determination not to expand gambling as a way to make up for budget deficit. Obama expressed concern that the "moral and social cost of gambling, particularly in low income communities could be devastating."

He also noted the reach of his state's nine casinos, which earn around $2 billion dollars annually and contribute $800 million in taxes. "We already have significant gaming opportunities," Obama is quoted as saying. "But, for us to foment gambling in every tavern and bar across the state of Illinois makes no sense."

In this year's presidential primary campaign Obama has received $29,100 from the gaming industry, and in the run-up to the Democratic caucuses in Nevada he notably praised the state for using gambling to its economic advantage. In addition to the endorsement of the Culinary Workers Union, to which many Nevada casino employees belong, he also won the support of Elaine Wynn, director of the Wynn Hotel and casino in Las Vegas. Wynn is among a network of high-profile Nevada supporters charged with activating the grassroots and appearing as a surrogate for Obama around the state.

Finally, demonstrating softer rhetoric toward the gaming industry as a presidential candidate than he had shown as a state senator, Obama wrote in a statement on his candidacy to American Indians, "I understand that Indian gaming revenues are important tribal resources for funding education, health care, law enforcement and other essential government functions."

Yet, all of these remarks -- both Clinton's and Obama's -- do not add up to any clear pattern, and neither candidate has released any policies or proposals related to gaming. And as far as their voting records go, the American Gaming Association's Fahrenkopf suggested the candidates simply have not had much of an opportunity to influence gambling legislation during their few years in the Senate.

What is clear is that state and local governments play a much more significant role than Congress and the federal government when it comes to regulating the gaming industry. Clinton and Obama have both indicated they support states' rights in determining many internal issues. (Every state but Utah and Hawaii has legalized gambling.) The role of the president may be more about setting the tone on this issue than actually pushing legislation through.

Given both Clinton's and Obama's apparent willingness to concede the economic importance of gambling in most states, should a Democrat be elected in November the gaming industry is likely not to encounter too much resistance from the White House. Asked whether one candidate is preferable to another, Fahrenkopf offered diplomatically, "I don't anticipate there would be any change at the federal level."

And while presidential campaign contributions put the gaming industry's money on Clinton -- she has been given $84,225, compared to Obama's $29,100 -- the candidates' rhetoric suggests either one will be a win for gambling interests.