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Reid urges Obama to clarify stimulus restrictions on casinos

WASHINGTON — Sen. Harry Reid urged the White House on Friday to clarify restrictions on spending federal stimulus money on casinos, saying the rules are vague and “overly broad,” and are causing confusion in Nevada.

Reid said some potential beneficiaries in the state are being discouraged from applying for stimulus grants for fear of running afoul of the law.

“The overly broad language hurts nonprofits in Nevada, especially,” Reid said.

In small communities, often there are few choices but for service agencies to hold workshops and events at hotel-casinos, Reid said. Yet stimulus guidelines issued by the Obama administration appear to make that a no-no.

“Nevada has a long history of community integration with hotel-casino complexes,” Reid noted in a letter addressed to President Barack Obama.

The concerns stem from a provision in the sweeping economic stimulus bill passed by Congress in February that prevents stimulus spending “for any casino or other gaming establishment.”

The gaming industry expressed some concern when the section was placed in the bill, first in the House, and then through an amendment by Sen. Tom Coburn, R-Okla. But industry officials and supportive lawmakers such as Rep. Shelley Berkley, D-Nev., said they thought the impact would be limited.

Their interpretation was that no stimulus funding could be spent on casino construction or operations. Since no gaming companies had expressed interest in applying, the concern was muted.

But new guidelines the Obama administration has issued to advise local organizations on how to apply and spend stimulus grants are causing some worry.

Some Nevada organizations fear the rules could forbid them from using stimulus funds to hold meetings or book rooms at hotels with casino attachments because it could be seen as an indirect benefit to gaming.

Reid said groups that help domestic violence victims in rural Nevada could be prevented from sheltering battered women if the only available hotel rooms are in casinos.

Jon Summers, a Reid spokesman, said the senator stepped in after he was contacted by the Reno-based Nevada Network Against Domestic Violence. Sue Meuschke, the group’s executive director, was traveling Friday and could not be reached for comment.

Contact reporter Steve Tetreault at stetreault@reviewjournal.com or 202-783-1760.

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