US senator bets on Internet poker as odds dwindle

* Proposes to legalize Internet poker for casino operators

* Measure supported by casino trade group

* Measure opposed by Southern Baptist Convention

LAS VEGAS, Dec 14 (Reuters) - U.S. Senate Majority Leader Harry Reid is pushing for a last-minute bill to legalize Internet poker -- at least for operators of existing brick-and-mortar casinos.

The measure is seen as a windfall for Las Vegas-based companies like MGM Resorts International MGM.N, which closed down its online gambling operations nearly a decade ago amid regulatory uncertainties, and Caesars Entertainment, which operates the World Series of Poker.

The bill, now under discussion. would legalize only Internet poker, not games like roulette or where players are betting against the casino.

“Senator Reid is working to find a way to get it done,” a spokesman for the Nevada Democrat said in an e-mailed statement.

Reid’s office declined to comment on whether the measure would be added to the omnibus spending bill or other legislation before the current lameduck session of Congress ends.

In November 2008 -- after the election that ushered in President Obama and Democratic control of Congress -- the Treasury Department and the Federal Reserve issued a final rule aimed at stopping illegal Internet gambling.

The rule solidified the Unlawful Internet Gambling Enforcement Act, passed in 2006 when Congress was still controlled by Republicans.

The 2006 law -- which barred credit cards and banks from accepting Internet gambling payments -- cost Europe’s online gambling companies billions in lost market value as they were forced to retreat from one of their most lucrative markets.

U.S. casino operators had already pulled back from the Internet. MGM closed its online unit in mid-2003, citing an “unclear” legal and political climate in the United States and elsewhere.

With Republicans set to take control of the U.S. House of Representatives in January, the casino industry believes the next couple of weeks are all that is left before the window of opportunity for legislation closes for at least several years.

That is because groups like the Southern Baptist Convention and some key Republican lawmakers remain opposed to online gambling.

The American Gaming Association, the trade group representing commercial casinos in the United States, supports Reid’s legislation.

“This is tough law-and-order legislation that puts in place a solid regulatory framework and legal oversight that will prevent illegal activity and protect the estimated 15 million Americans who already are playing poker online,” Frank Fahrenkopf, the trade group’s chief executive, said in a statement.

He estimated the proposed legislation would bring in more than $3 billion in tax revenue and create thousands of jobs.

Barrett Duke of the Southern Baptist Convention conceded that the bill’s revenue-raising potential was its biggest draw for lawmakers at a time of fiscal uncertainty.

“We think it is an irresponsible way to raise revenue,” he said in a telephone interview. “We believe it is not in the best interest of the family to have even regulated gambling over the Internet...” (Reporting by Deena Beasley; editing by John Wallace)