The chief executive of the American Gaming Association (AGA) now sees a majority of the world’s largest casino companies moving towards a partial embrace of internet gambling. Ahead of a meeting this week in Vegas, Frank Fahrenkopf outlined his powerful trade group’s evolving stance on online wagering, as well as the economic challenges the gaming industry is now grappling with.

The American Gaming Association, which represents the United States land-based casino industry, spent $900,000 in the first half of 2007 to lobby the federal government, according to disclosures filed last week with the Senate's public records office.

The economic downturn has provided fresh ammunition for anti-gambling critics in the US, who are now arguing casinos have failed to live up to their billing as engines of economic growth. The attacks have drawn a strong response from American Gaming Association, which has issued a detailed critique blasting the latest arguments put forward by the industry’s opponents.

The Las Vegas-based casino giant is only prepared to back federal moves approving online gaming in the US if all regulatory and tax oversight remains at the state level, according to a senior MGM Mirage figure.

The American Gaming Association will remain neutral on the hotly contested issue of whether the US should legalise internet gambling. The decision by the powerful trade group, in turn, is expected to put a dampener on efforts by online wagering boosters to pass legislation in Washington, D.C.

Representative Shelley Berkley’s bill to implement a study into the feasibility of internet gaming regulation in the US is set to be discussed in a Senate judiciary hearing today, but US legal commentators are divided over whether a Washington-led initiative is the most viable solution, with some believing State regulators should take the lead.

The head of the powerful American Gaming Association now believes a bill that focuses solely on legalising internet poker would likely have the best chance of clearing Congress. The comments by the trade group chief could bolster poker advocates, who have been lobbying hard for legalisation both in Washington and on the state level.

The ties that bind the US gaming industry’s most powerful lobby group to the Senate leader are strong, but with Harry Reid now facing defeat in the upcoming elections, and Barney Frank’s role also in jeopardy, even their most ardent supporters are coming to terms with the realities of looming political change.

The American Gaming Association is lobbying for key accounting provisions to be included in the Obama Administration’s $780bn-plus stimulus plan in a last ditch bid to provide a financial boost for the beleaguered casino sector. The trade group’s push on the controversial bill comes as it lays plans to make its voice heard in Washington on a range of legislation over the coming year.

Gaming giants Harrah’s and Wynn Resorts believe the possibility of state lotteries moving into the online realm represents a threat to the commercial casino sector’s own internet gaming ambitions in the United States.