How Will the New Congress Impact Nevada? Let Me Count the Ways...

As we ring in the New Year here at the American Gaming Association (AGA), the future holds exciting prospects for the gaming entertainment industry. Here in Washington, the city is abuzz with anticipation of the next Congressional session, as we usher in the 110th U.S. Congress on Capitol Hill. This year, as you know, is an historic one, as Democrats take control of both chambers of Congress for the first time in 12 years, and also for the first time since the inception of the AGA. Looking ahead at this year’s legislative calendar, the reshaping of Congress in the recent election and the changes in Congressional leadership that followed are likely to prove positive for both Nevada and the gaming entertainment industry across the country. 

Among the most significant changes affecting our industry is the fact that several leadership positions in Congress now will be filled by individuals hailing from gaming states or who have extensive experience with our industry. While this certainly will not garner the industry any special favors, it is likely these new leaders will be more educated and open to industry concerns. Having lawmakers in leadership who understand our issues and the contributions we make to the communities where we operate cannot help but be a good thing.

Particularly significant for the state of Nevada, veteran Sen. Harry Reid has become the newest Senate Majority Leader, and Rep. Shelley Berkley was recently selected to serve on the House Ways and Means Committee; these represent two of the most prestigious positions on Capitol Hill.  I have long said that the two most important committees in Washington for the gaming industry are the Senate Finance Committee and the House Ways and Means Committee, as all tax proposals must pass through these committees. Having Sen. Reid in the lead position in the Senate and Rep. Berkley on the House Ways and Means committee will ensure there are strong voices in both chambers of Congress speaking up the gaming industry.

The Democrats will be ready to get right to business once the legislative session begins, as they already have mapped out an aggressive agenda for the first 100 hours of the new session. Democrats took control of Congress by running on a platform of “New Direction” – to unite rather than divide the country. Their new direction consists of a commitment to integrity, civility and fiscal responsibility. The first order of business in the new Congress will be ethics reform, with political insiders expecting Democrats to almost immediately introduce an ethics package designed to break the link between lobbyists and legislation. 

The AGA has a long history of ethical conduct in our dealings with legislators and their staffs, and this December we took our commitment to the next level by adopting a new Code of Ethics and Conduct for our organization, employees and consultants. The Code reinforces our commitment to upholding the highest ethical principles and standards, and covers a wide range of issues including employee relations, confidentiality and record keeping, conflicts of interest, political contributions and more.  It also establishes an ethics committee to monitor compliance with the Code. 

The AGA takes this issue very seriously, and we welcome Congress’ increased scrutiny of all lobbyists’ activities. We also encourage individual companies and organizations throughout the gaming industry to adopt policies similar to our new Code. Collectively, a shared commitment to fairness, openness and integrity will go farther to generate goodwill towards our industry on Capitol Hill than any amount of lobbying ever will.

In addition to ethics reform, the new Congress also is expected to tackle immigration reform, an issue very important to our industry. With the Democratic takeover of Congress, the passage of a comprehensive immigration reform package during the 110th Congress is much more likely than it has been in previous years. As a part of any immigration legislation, Democrats are expected to insist on a pathway to citizenship for most of the estimated 12 million illegal immigrants currently residing in the United States. This objective is in line with the shared position of UNITE HERE, the U.S. Chamber of Commerce and the AGA.

Although the 109th Congress last fall passed the Unlawful Internet Gambling Enforcement Act of 2006, Internet gambling also will likely continue to be an issue in Washington this year. Rather than directly outlawing Internet wagering, the legislation passed last year makes it illegal for banks, credit card companies or similar institutions to collect on a debt incurred on an online gambling site. The bill did not, however, clear up existing confusion in the U.S. judicial system about the legality of Internet gambling itself or whether existing laws already apply to the activity.

The real impact of this legislation, and whether it will prove to be effective at curtailing the expansive growth and popularity of online gaming, remains to be seen. Much will depend on the nature of the regulations ultimately crafted by the Treasury Department and Federal Reserve Board to guide and enforce the new law, a process that could take up to nine months to complete.

The AGA took a neutral position on the legislation as it worked its way through Congress, but the AGA board of directors at its meeting in December renewed its call for an independent study of the issue.  We plan to work with members of Congress during the 110th session to advance that aim.

2007 also will see the Democrats addressing a number of labor and employment issues that will have a definite impact in Nevada. First on the list is an increase in the minimum wage, which has not been raised since 1997. Several other issues also will populate the Democrats’ legislative agenda in the coming year, including U.S. security overseas and here at home, affordable health care and prescription drugs, families and education, environment and energy, and a number of tax issues.  Democrats also are expected to advance an initiative on union elections known as the Free Choice Act, which would mandate that union elections be completed by secret ballot and that a majority vote of employees would establish a union at a property or within an industry.

On the regulatory front, the Internal Revenue Service (IRS) also has extended the deadline for the renewal of voluntary tip rate agreements for Nevada gaming employees, so negotiations between the IRS and individual gaming companies to determine fair and reasonable tip reporting guidelines for gaming employees will be ongoing throughout the first quarter of the year.

It certainly will be a busy year here in our nation’s capital, and we at the AGA are looking forward to another successful year of representing the U.S. gaming entertainment industry and protecting its interests here in Washington.