Brennan Jr. Discusses New Jersey Sports Betting, The NFL, and Online Poker
In Part II of Gambling911.com Senior International Correspondent Jenny Woo’s intensive sit down interview with Joe Brennan, Jr, Interactive Media Entertainment & Gaming Association founder, Brennan talks about his efforts to legalize sports betting in the state of New Jersey, which could open the doors more quickly for European-based betting firms to get a foothold in the U.S., more quickly perhaps than if federal legislation were to pass. Brennan, Jr. also talks about last month’s settlement deal with an online poker processor and U.S. authorities.
JENNY: Do the states not have a better basis for legalizing online sportsbetting? How can the federal government say poker is good and sportsbetting is bad?
JOE: Hypocrisy. Haha. I don’t know. It’s interesting in that – one of the things that always talked about why poker on the Internet should be exempted from any federal laws that prohibit Internet gambling is because poker is a game of skill and not a game of chance. I agree with that. Poker, you can actually win at. With other games, like Black Jack, slots, roulette, and craps – the house edge is such that even when you win if you continue to play you’re going to lose. The house eventually gets it all. So I agree with that argument that poker is a skill game. Now the interesting thing is that last year when Delaware was going to restart full sportsbetting, all the professional sports leagues opposed it in federal court. The NFL and their attorneys in opposing it when they submitted their brief – what they argued was that betting on sports, betting on single games, single game picks was a skill game. The reason why they argued that was that Delaware’s sportsbetting laws provided for a “sports lottery”. That the prevailing characteristic of the sports lottery had to be that it was a game of chance. The NFL was saying that picking who’s going to win based on the spread is not a game of chance. It’s a skill and they’re correct. They’re absolutely correct on that. Now you have two skill games – poker and sportsbetting – betting on single games. What do you do? If you take the NFL’s line of reasoning, well right now Senator Bob Menendez from New Jersey has in the Congress a skill game bill in which specifically prohibits sports. But how can it do that? If betting on sports is a skill game and so says probably the biggest expert on sports in the country, which are the NFL and their attorneys. Haha. If you’re asking me how can you do that? I’ll just give the same answer that I give to my wife all the time. I’m like, “Look, if the stupidity is not my own, I usually can’t do a good job of defending it.”
JENNY: What’s your opinion on the NFL's decision to back off stopping Barney's legislation (a result of Rep Peter King's amendment 3).
JOE: Yeah, they’ve been talking about that for years. I’m not surprised. I think for them it was a wise political choice because opposing Internet poker – I think what they were doing is they’re angering more people. As long as they were getting that specific language that says, “Oh you can’t bet on sports”. They’re satisfied. Prior to that, the NFL sees something like Internet gambling and Internet poker as a gateway drug. Not for the players because frankly they don’t care about the players but for government. If government starts realizing decent tax revenue off of Internet poker – well Internet poker only makes up 15% of the Internet gambling market. Casino makes up to 20%-25% and sportsbetting makes up to 45%. So by their reasoning is, “Well if government starts getting used to and really enjoying that tax revenue that they’re from only allowing 15% of the market” – eventually they’re going to want that big 40%-45% chunk that is sportsbetting particularly when it goes on in their offices, their homes with their friends, down at the golf club. It’s the most readily available and socially accepted form of gambling is sportsbetting. So they’re trading something away to try and keep from seeming quite so strident. My sense is that over the course of let’s say the next 5 years plus or minus – the NFL and other pro leagues probably recognize that this is like the great final battle here because there’s so many things that are combining right now to make it difficult for them to continue to stand in opposition to this with the arguments they currently have.
Let me say this, I completely appreciate and accept that the NFL and the other pro leagues and the NCA have a point, which is we have to maintain the integrity of these games. They’re absolutely right. The only question is, well how do you maintain that integrity? Do you continue to have a gray market black market economy that represents probably approaching half a trillion dollars a year in sports wagering? Or do you have a transparent state government regulated marketplace and everything that that brings? I mean, we would argue that it seems logical and rational to think that the state regulated open and transparent one would be preferable because sportsbetting is certainly not going anywhere. Since that passed the law back in 1991, you’ve now have seen just an explosion of sportsbetting. Where as before, you had to bet peer to peer with a friend or with your bookie down at the diner at the end of your neighborhood. Now, you’ve got the Internet. You’ve got fantasy sports, which let’s face it that that’s just another form of proposition betting. That’s all about gambling. It’s just exploded access to it. It’s a fairly common place.
The other day, suburban Washington D.C., I walked into my local 7Eleven to get my super duper king American size sugarless Red Bull. While I was standing there at the magazine rack, I saw this one publication. It was like Game Day USA and it was the preview of the upcoming college and NFL football season. If you flip through every page, top and bottom, had an ad for an online sportsbet. Amazing! Suburban Washington D.C. It’s one of these things where – plus or minus 5 years – the league’s are going to have to essentially manage a crash landing for themselves. One of Nevada’s chief regulators in this past year, the public conference said – his answer to a question – “Where do you think the greatest growth is going to come in gambling over the course of the next 10 years?” He said, Sportsbetting.” There is so much pent up demand for it. There’s so much public debt. There’s such a yawning need for revenue for government. People just look at it and say, “This is hypocrisy.” It’s hypocrisy in that we’re saying that we’re essentially closing our eyes to something that’s right in front of us. That if anything, it can be better protected by state regulation than it could just by keeping it underground. If they could stamp all of sportsbetting out, then maybe they’d have a chance. But they’re not. Now the tough thing is that you’re going to get people who are going to compare it to narcotics and say, “Oh why don’t we just legalize drugs.” Well it’s because right now you don’t have people down in the border area of Mexico and Texas killing thousands of people every year over sportsbetting.
JENNY: Officials have said that online gaming is the crack cocaine of gambling.
JOE: But the thing is it’s not. One of the things that they always do is that they always run to the profile of, “Oh you’re taking away from the most vulnerable segment of society.” What they’re describing is they’re describing people who buy lottery tickets. People who buy the most lottery tickets are people who are at the lower end of the socioeconomic scale in this country. Christ, the other day I stood in a freaking line in 7Eleven (again) with this woman who spoke very little English and she was tying up the one on duty cashier because she won a scratch off. Instead of taking the money, she bought more f**king tickets. It was driving me nuts! Take the money and run honey! That’s what I said out loud. What do you think is going to happen? That’s what they want you to do. That’s why they allow you to do that. When you start talking about people who gamble on the Internet, by definition you are talking about a completely different socioeconomic scale. One, they gotta be computer literate. Two, they gotta have a computer that – three – is hooked up to a broadband connection and four – they have to have either a credit card and/or bank account. Those things alone, you have already separated them from people who buy lottery tickets. Here’s the thing, credit cards have limits. All this “Click a mouse, lose your house” bulls**t – I’ll give them credit – it sounds great. It really does. As a guy who came out of marketing and copywriting back in the day, I thought it was great. Crack cocaine of the Internet? Really the crack cocaine of the Internet is pornography. There are probably more guys up on Capital Hill right now looking to see if the doors are locked on their office over free pornography than they are about “Oh God I don’t anybody to catch me making my picks in major league baseball or this week’s football.” So I don’t buy that for a second. But the “click a mouse, lose your house” thing is just crap. It’s a great bloody shirt for them to wave in front of people. It’s a great sound bite. It is completely not true.
JENNY: What is your take on why NJ Governor Chris Christie has not joined the suit to legalize sportsbetting in New Jersey. Speculation is that he had to back out due to pressure from the NFL and it’s allowing the 2014 Super Bowl to be played in the Meadowlands.
JOE: Nah. I mean he already got the Super Bowl. I think it has more to do with national politics than anything else. It’s been no secret since Governor Christie was running this time last year that he already had a national profile and that’s in part because last year he was running for only two of the major offices that were up in an off year. Last year, the two big elections were the Governors for Virginia and New Jersey and the fact that Governor Christie was able to prevail in a state where registered Democrats vastly out number registered Republicans was really an accomplishment. So because the Republican Party is very short on star power right now, he already was getting an interesting glance from Party leaders and then – most importantly – the media. They need to hook onto somebody. He’s an interesting guy. When he talks you don’t get what you get out of a lot of politicians, which is that kind of like “just a little too much wax, polish, and sheen on your delivery”. He definitely comes off as spontaneous. He’s not the usual – you just look at him – he’s this big beefy dude. Bush used to call him the “big boy”.
On a side note, I was at a fundraiser back in the Spring where I got a picture shot with the Governor and I thought “Oh Jesus, this is going to come back and haunt me.” But I leaned in there and then about two months ago somebody finally sent me a copy of the picture and I looked at it and thought, “Oh my God, he’s supposedly this big beefy big boy.” I didn’t look that much smaller than him. I was thinking, “Man, I better get into the gym.” But he’s probably the only Governor that goes around where his state police escort is probably smaller than he is.
Anyway, the other thing that Christie did was he came in and he said, “I’m going to cut the budget. I’m going to cut spending.” God help him, he did. It was amazing. He went in there and by hook, by crook, by bullying, and by cajoling and using the bully pulpit – they got spending in New Jersey. He did that in the face of a legislature that is overwhelmingly Democratic in its majority. Now, good God he’s a rock star amongst Republicans because who are the other Republicans that are running for President - a whole bunch of unemployed Governors - Sarah Palin, Mitt Romney. He’s (Christie) like the anti Romney. Romney is this polished, handsome, tall, lean, moneyed, probably this too smoothed kind of guy and Governor Christie is not. He is a beefy, plain spoken, he’s very Jersey, gregarious, kind of a “I shoot from the hip” kind of guy and it’s worked for him so far. Now, as a result, with the lack of star power and the only other options being a bunch of unemployed Governors – Governor Pawlenty, Governor Palin, Governor Romney – that’s what these guys are gravitating towards. So he’s getting a lot of looks. He’s getting a lot of television time and at the end of the day it was just easier for him to say, “Look, we know this suit is going to go forward without us. So if we don’t have to get involved, why get involved. We can shrug it off and say that the Governor thinks that this is unworthy – it’s that we have limited resources and we have to focus on stuff that is more critical.” Alright. Fine.
Now, did the NFL intimidate him off of it? Well, let’s just say that I think it influenced the timeline for the decision because we ask for multiple extensions to consider it. He was playing a game of brinkmanship with the NFL and I’d like to think that if anything iMega deserves at least a couple of really good tickets to that 2014 Super Bowl because there’s no doubt in my mind that the NFL – in part, not totally – were concerned about sending a message about sportsbetting and holding this over New Jersey’s head. There was going to be a vote on this bill in the Senate – the sportsbetting bill – I think five days before the NFL was going to announce. When people got together and said, “Well, maybe we should consider holding off until we see what the NFL is going to say.” We certainly didn’t oppose that. We thought, “Great! If New Jersey can get, God bless.” We had no problem with that. The thing is is that the sportsbetting bills are all still alive in New Jersey. That’s the thing. Nothing is really has changed. There’s certainly no fatalism because he didn’t join. I really wish though his public relations guy would have just not gone out there skylarking when he announced it to the press that they were doing it because in a letter to the court from the Governor’s councils – they said exactly what I said, which is, “We have limited resources right now. There are a lot of really critical problems that deserve more of our attention than this. So the Governor declines to get involved.” Okay, fine. That’s what they told the court. No, the public relations guy goes out there and he starts skylarking saying stuff like, “Oh, it was a legal long shot anyway.” We have people who talk to the Governor’s office and we didn’t say that. Haha. The sad thing is is that the justice department, when they submitted their brief – I think it was about a week or two ago – they quote the PR guy and not the Governor’s lawyers or the brief that the Governor submitted to the court. They quote the PR guy. So apparently graduating with a degree from Seton Hall or something like that in communications and working in Public Relations qualifies you to be Exhibit A in the Department of Justice’s brief replying to our brief. Whatever. I just had to laugh.
JENNY: What’s your opinion on the settlement agreement between Allied and the US Attorney's Office?
JOE: Yeah, that one took up quite a bit of the day this was reported (August 17th). Part of me thinks that they must have rushed this one out the door because if look at both documents – both the press release and the court document – somebody didn’t go through and edit it. It repeated certain sections verbatim right after another. I was like, “Didn’t I just read that? Am I experiencing déjà vu?” So it seemed like it was done either haphazardly or rushed. One person said, “Oh this has all the earmarks of people just clearing out the files.” What do you got? Alright, just clear it out and get rid of it. Other people are kind of the mind of, “Well here’s one more person they can add to their (Department of Justice) cooperating witness list.” If they are going to build a case against say PokerStars and FullTilt then it’s one more person who they had a business relationship with and that’s been referred to specifically by name in the text of the court filings. The principles of Allied, are they going to be required to be cooperating witnesses the same way Doug Rennick is cooperating witness? Almost certainly that Australian guy with the bad moustache, Daniel Tzvetkoff, he’s going to be more than likely – the day he got brought in was the day that I think Doug Rennick, the Canadian guy cut his deal with the DOJ. So everybody’s aware of the standing offer is out there. Then, let’s not forget that both the people at PartyGaming Corporate and then PartyGaming founder and possessor of one of the world’s funnier names, Anurag (Dikshit) – correct pronunciation is Diksit but I think we all know what we’re talking about here. They’re required to be cooperating witnesses as part of their agreements with the Department of Justice. So there’s an awful lot of people out there who can do an awful lot of talking if they choose to about – we’ll say – the inner workings of the online poker business. I mean at the end of the day, I don’t anybody who wanted to play poker yesterday – anybody who wanted to play poker could. The wheels keep turning.
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Jenny Woo, Gambling911.com Senior International Correspondent
