The fight over Internet gaming has long been dominated by high-flying groups such as the Poker Players Alliance, but state legislators with a stake in lottery profits are now also laying their cards on the table.

Alarmed by rumors that the Joint Committee on Deficit Reduction could look for federal savings in new online gambling rules, Maryland Gov. Martin O’Malley (D) wrote to the panel’s co-chairmen Thursday to urge them “to oppose proposals to federalize Internet poker and casino gambling.”

New federal gambling rules could jeopardize the $519 million that Maryland’s state lottery pulls in each year to underwrite education and other programs, O’Malley wrote to Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas), who lead the super committee

Many state legislators and lottery operators object to a bill introduced earlier this year by Rep. Joe Barton (R-Texas) that would end the federal ban on online gambling and federally regulate Internet poker. Cash-strapped state officials fear that new federal rules could rob them of a crucial revenue stream.

The California Legislature passed a resolution last month asking the state’s Congressional delegation to preserve the state’s right to operate its own Internet gambling system. The North American Association of State and Provincial Lotteries, which represents 52 lottery organizations, has issued a resolution opposing any federal rules that would encroach on states’ right to regulate their own gambling systems. Gaming technology companies, such as GTECH Corp., are also watching closely.

They’re up against influential gambling industry players, including the Poker Players Alliance, which according to the Center for Responsive Politics has spent more than $800,000 on lobbying this year. American Gaming Association lobbying this year has hit $1.2 million, according to the CRP. The players like the Barton bill because it creates uniform standards and, at the same time,  gives federal approval to online poker.

In preparation for an Internet gambling hearing Tuesday before the House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade, the Poker Players Alliance is asking gamers to send “encouraging messages” to top subcommittee members via Twitter and Facebook. The group’s website links poker players to a pre-written Twitter message that reads in part: “Please back Rep. Barton’s H.R. 2366 at the 10/25 hearing.”

Merger Mania

It’s nothing new that the advocacy industry is moving away from traditional lobbying built around contacts with federal officials and into a broader, more fully integrated business that combines lobbying, public relations and grass-roots policy strategy.

But a few recent mergers underscore how that accelerating trend is changing the face of K Street. Exhibit A is the recent merger between the national public strategy firm known as Mercury and the government affairs shop of Clark & Weinstock.

The new Washington, D.C., lobbying and public relations operation Mercury/Clark & Weinstock is headed by former Reps. Vin Weber (R-Minn.) and Max Sandlin (D-Texas). Weber was managing partner of Clark & Weinstock; Sandlin led Mercury’s Washington operations.

Clients “want both lobbying and public affairs,” Weber said, adding: “I think that the grass-roots and grass-tops business has been growing for a long time. I think it’s now an expected part of any serious lobbying strategy.”

The official launch of Dutko Grayling reflects a similar industry shift. Dutko Worldwide has been relaunched as Dutko Grayling, a subsidiary of the global communications company Grayling.

“I think it gives us enormous opportunities,” said Lord Peter Selwyn Chadlington, CEO of Grayling parent company Huntsworth PLC, who breezed through Capitol Hill last week to talk about Dutko Grayling. Traditional lobbying needs to react to changes in the marketplace, said Chadlington, who also cited the growing integration between public relations and advocacy.

In D.C., seasoned Dutko hands remain in charge. Dutko Grayling’s federal lobbying group is headed by Andy Wright  and Kim Koontz Bayliss. David Beightol heads state and local and government marketing. Craig Pattee is in charge of education policy and risk management consulting, and Mark Irion heads Grayling’s new public affairs/public relations outfit here.

Occupy Everything

As labor unions increase their involvement in the Occupy Wall Street movement, including an official endorsement from the AFL-CIO, local unions are working more closely with Occupy DC demonstrators camped out in McPherson Square.

On the eve of a recent rally to demand better wages and benefits, organizers with the Service Employees International Union arm that represents property service workers in the area strolled over to McPherson Square to ask Occupy DC activists whether they would like to come along. Known as SEIU 32BJ, the property service union represents 17,000 commercial office cleaners in the D.C., area. Occupy DC demonstrators helped swell the ranks of the union’s rally to 1,500; the workers threatened a strike if a pending contract didn’t include wage increases.

“We believe that the folks from the Occupy movement are on the right track, and we’re going to be supporting them,” said Jaime Contreras, Capital Area District Chair for SEIU 32BJ. After the rally, the union reached a tentative contract agreement with the Washington Service Contractors Association that includes an average 4 percent yearly pay increase for cleaners.

“It’s probably going to develop into us turning out for their events and them turning out for our events,” said Legba Carrefour, a participant with Occupy DC, which has no official spokesmen.

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