Brennan, Jr: Math Will Be Key To Online Poker Measure Becoming Law
In a sit down interview with Interactive Media Entertainment & Gaming Association founder Joe Brennan, Jr., Gambling911.com’s Senior International Correspondent Jenny Woo covered everything from the chances of online poker becoming legal on both the federal and state level to his opinion as to why the NFL seems to have backed down in its opposition to legalized Internet poker.
JENNY: Do you think Barney's measure will pass? If not, Why? And if so, do you think it’ll pass in 2010?
JOE: Well obviously it passed his committee, which is actually a bit of a victory there. Not to make light of it but it was doubtful for a while whether or not he was going to be able to pass that bill out of his own committee. I think when everybody knew for sure that it was going to pass is when you tuned in that morning to the television and you saw Michele Bachmann, who’s the congresswoman from Minnesota, tacking on amendments rather than taking her time to oppose the actual bill. She was tacking on things for - you know - going after deadbeat dads who weren’t making child support and alimony payments. And so you’re like, “Alright, this thing is definitely passing because otherwise these people wouldn’t bother tacking on these kind of amendments.” But having said that, I know that there is an awful lot of effort being made particularly by guys like John Pappas and the Poker Players Alliance to try and move this thing along. Honestly, I really hope they’re successful. If anything, on a personal level because John has been busting his ass on this thing for years.
The problem is that we keep running into the – it’s more about math than it necessarily is about the issue. The math is the magic number of 49 and 49 is the number of “McCain Democrats”. Those are Democratic congressmen or congresswomen who won in their district in 2008 but the Presidential candidate that won their district was John McCain. So it kind of flies in the face of that wave where Obama was sweeping in that tide of anti-republicanism and these congress people are sitting in districts that were actually won by John McCain in the face of that huge wave – the Obama wave.
Those are very tenuous swing districts right now. There’s an awful lot of concern amongst the leadership on the hill and the democratic talk is that if this issue were to come to a floor vote, there’s concern that that may make it difficult for these people who are Democrats. But their obviously running in moderate to more conservative – we’ll say like center to center right congressional districts that that may aggravate the base on the other side of this issue. People who will still be willing to vote anti-gambling or their social conservative. Also, frankly there’s an awful lot of people on the left – will call them nanny state Democrats – they’re kind of like the flip side of the same coin. They don’t think that there should be gambling because they think we should be preventing people from harming themselves as well. On the far right, it’s from a moral sense. On the far left, it’s from a sense of – a lot of times people don’t really know what’s good for them and we have to prevent them from harming themselves.
JENNY: I recently had the chance to interview Congressman Frank. He proved that Democrats and Republicans can come together and agree on something. In the future, do you think there will be more representatives on board after more information comes into play?
JOE: I think that there’s an opportunity for a little bit of bipartisanship but there certainly hasn’t been a sufficient enough effort from the lobby to do that. There’s been a real focus on the Democratic caucus from the D.C. lobby just because – you can’t spread yourself all over everybody. The Democrats were in the leadership because there were so many people in the Republican caucus who are still socially conservative. There are lighting rod guys like Bob Goodlatte, John Kyl and people like that that it’s difficult for those guys to get any kind of – it’s difficult for a moderate Republican to get any distance from those guys. The funny thing is is you may see with the tea party movement more of a return to Republican conservatives – small c conservatives who are more interested in fiscal conservatism than they are in social conservatism. Going back to more of the Reagan era Republicans that were more about fiscal responsibility, were more about tax reductions and those kind of issues than they were about abortion, gun control, and issues like that – culture war issues. So there may be an opportunity for that if – we’ll say - the tea party people and also probably more importantly independents. Independents make up the vast majority of the American electorate. I’m an independent – a registered independent. Right now, even though there’s more enthusiasm on the Republican side than there is on the Democrat side heading into this midterm election – the fact is is that Congress’ approval ratings have slipped below fifteen percent. That’s a historic low. You can’t go to any other point in American history and say, “Score’s worse”. The funny thing is is that you hear people in Congress barking about, “Oh George Bush, George Bush!” George Bush has better numbers than the Congress. I think one of the difficulties – for a while it’s been difficult to get people to understand that this is truly not a Republican/Democrat issue because there’s just as much opposition on the Democratic side of the isle as there is Republican opposition. This is still a touchy issue. Gambling is still something that you do on the cheating part of town – for the most part.
This is probably a horrible analogy to make but – obviously people love to gamble but people also (based on revenue and usage) people love pornography. But if you held a rally in support of pornography on the lawn in Washington D.C., you probably wouldn’t get too many people showing up. The ones that did, you’d probably wouldn’t want them to be the face of your movement. Having said that, I’m apparently one of the people that has shown up for as far as gambling. Gambling still has a certain remove in American society. People are comfortable with it being in a casino on the proper zoned part of town or out in the middle of a desert or out on a peninsula of beach front property in New Jersey. They’re comfortable with that. It’s still a generational thing with the population being comfortable with it being right in their own home.
Now the Facebook generation, people are age and younger, they’re entirely comfortable with that. They’re fine with that. That’s where they are. The generation that currently sits in Congress – not so much. They’re still trying to develop an understanding sometimes of the Internet and it’s dynamics and how our civil liberties should be conveyed in that online space before they even get the question of, “Well should people be able to bet on sports or play poker for money in the comfort of their own home?”
JENNY: Should the measure pass, what are the possibilities? For example, how would this impact the individual states? Do you foresee sports betting becoming legal at the state level and poker at the federal?
JOE: What are the prospects going forward? I think it’s going to be very tough to pass Barney’s bill before this Congress expires the beginning of next year just because it’s not a top-flight issue. It’s an issue with some risk for Democrats who are already in a very tight battle to try and retain seats in a midterm election. The leadership – it’s not whether they’re pro-gambling or antigambling; it’s just they’re pro difficult issue. They’ve already got people running on having voting on the stimulus package, the TARP program, health care, and a whole rack of things that were very very tough votes. So adding another tough vote particularly on something like gambling may be something that they don’t want to do. Then again, they might figure, “Well s**t people already hate us. Throw in one more tough issue on there. Is it really going to make them hate us that much more?” I don’t know. I tend to think they’ll shy away from it.
The other thing is that Harry Reid at one point had looked like he was in some trouble and hanging on to his seat. Now, he’s moved ahead and pulling out in Nevada so there’s less of a need for him to pull out some kind of October surprise – if you will – and try to introduce an Internet gambling bill of his own. He gets a lot of support from Harrah’s and other operators but a lot of the casino companies that he gets support from they’re not really interested in a federal regulatory structure. They would be more inclined towards a state regulatory structure.
Moving it to the question of what are the long-term prospects for say like poker and sportsbetting? Well sportsbetting still needs to have successful litigation. iMega along with state Senators in New Jersey and some other co-plaintiffs are challenging in federal court, The Professional and Amateur in Sports Protection Act (PASPA), which prohibits the expansion of state regulated sports gambling beyond the four states that already have it. So that has to happen.
At the same time, states are looking at - if the law is over turned in federal court – that then would open it up for states to decide on their own whether or not they wanted to offer sportsbetting. We’re challenging the law for the same reason that the justice department opposed the law all the way back in 1991 when it was being enacted, which is that the law prohibiting the expansion of sportsbetting violates the tenth amendment – which simply says – any power not specifically given to the federal government by the states is reserved by the states. The states have always used this as the basis of for their maintaining control of gambling.
They license it and they regulate within their own borders. The federal government does not have a role. Now that would extend to something like poker. If New Jersey feels very strongly right now that if there’s going to be Internet poker - it should be done on an intrastate level and they should license, regulate it and (most importantly) tax it. They should be the beneficiaries rather than sharing any money with the federal government because right now their casinos don’t share tax money with the federal government. There’s no federal tax on brick and mortar casinos. That’s one reason why there’s a real reluctance on the part of the large casino companies – excepting Harrah’s – that are based in Las Vegas.
To get involved in lobbying on behalf of Barney’s bill because it’s a very short walk from the McDermott bill that goes along with Barney’s bill would provide for federal taxation of gambling revenue. Now it shares revenue with the states but just think of the slippery slope that is now for the casino companies.
Well the federal government is going to go and they’re going to tax Internet gambling revenue; you can imagine that they’re going to say, “Well why don’t we tax casino revenue.” And there’s history behind that. It’s the reason why the American Gaming Association was formed all those years ago was to combat an effort in Washington to pass a federal casino tax. So they’re largely against it. Every time you hear Frank Fahrenkopf talk about it he says, “They’re weary of the camel’s nose under the tent.” I always love trying to explain to Europeans what he means by that. So it’s less of a concern about the Internet and more of a concern of protecting their own current casino revenues in their brick and mortar operations.
Part 2 of this interview with be published tomorrow.
