Center: Billions at stake in costly debate over Internet gambling

Las Vegas-based casinos and overseas operators have begun an all-out battle over Internet gambling, which is mostly banned nationwide but carries with it the promise of billions of dollars in additional revenue for casinos and state governments. Three states began licensing online betting last year, and lawmakers are debating online gambling bills in seven others right now. In Washington, meanwhile, Congress is facing increasing pressure to either bar or regulate the fledgling industry federally.

The moves are coming in response to a concerted push orchestrated by a colorful cast of characters, including one of the most prolific political donors of the Super PAC era, an offshore company that only recently settled federal allegations of money laundering and bank fraud and a pair of benignly named groups backed by millions of dollars in casino cash.

In the process, the war over online gambling has created surprising alliances and divisions that are just now surfacing. Some in the industry warn that the practice poses a threat to the casinos' hold over gambling since customers would no longer need to actually visit a casino. Furthermore, since online gambling has been legal in other countries for years, American casinos face competition from more established online companies based in exotic locales like Costa Rica and Gibraltar.

One casino mogul, Sheldon Adelson, a prominent backer of conservative political causes, has pledged to spend "whatever it takes" to get Congress to ban Internet gambling outright, while industry giants like Caesars Entertainment and MGM Resorts have taken the opposite tack, banding together in an effort to legalize and control the growing market. Maneuvering quietly in the background are foreign entities, including the Isle-of-Man-based PokerStars, the world's biggest online poker operator, which so far has been denied a license to operate in New Jersey because of pending federal money-laundering charges against its founder. Along with the Garden State, Nevada and Delaware have legalized online gambling.

All together, this rich mix of interest groups spent $8.2 million lobbying the federal government on Internet gambling last year, according to the trade publisher GamblingCompliance, and millions more in state capitals from Trenton to Sacramento. The casino industry is also among the most generous in giving to political candidates across the country. According to figures from the Center for Responsive Politics and the National Institute on Money in State Politics, from 2009 to 2012 (state data for 2013 aren't yet available), the gambling industry contributed $287.6 million to state and federal campaigns, some directly to candidates and state ballot initiative efforts and the rest to groups like the Republican Governors Association, which can send the money to states where casinos are barred by law from making political contributions.