The District of Columbia is poised to become the first jurisdiction in the United States allowing residents & visitors to gamble online. We talk with the city lawmaker behind the new law, and hear how it will avoid falling victim to the federal law that currently bans banks & credit card companies from processing online gambling payments.

Guests

  • Michael Brown Member, D.C. Council (At-Large, Independent)

Transcript

  • 12:42:48

    MR. KOJO NNAMDIIf your city is strapped for cash, you have a few options if you want to raise funds -- cut programs, raise taxes or maybe legalize gambling. Washington, D.C., has chosen this last option, which just passed a congressional review period. This means it will now be legal at certain hotspot areas to wager on online poker. So besides cash for D.C.'s government, are there other benefits and will Congress or anti-gambling groups step in with objections? Here to tell us about the new law and its implications for our area is Michael Brown. He is an at-large member of the D.C. City Council. And he introduced the new law, which will allow online gambling in Washington, D.C. Councilmember Brown, good to see you.

  • 12:43:28

    MR. MICHAEL BROWNKojo, always nice to see you. Thank you.

  • 12:43:30

    NNAMDIHow soon can we expect to see online gambling in the city, and what form will it take?

  • 12:43:35

    BROWNWell, I think what you'll see probably is first to get folks acclimated with it. Probably, some time by midsummer, you'll see some free opportunities. And then by -- towards the fall, and the end of year, then the money part will come in. But we wanna get first folks comfortable first with the process and then we'll go live after that.

  • 12:43:53

    NNAMDIIf you have questions or comments about internet gambling in Washington, D.C., call us at 800-433-8850. At-Large Councilmember Michael Brown is here to take your questions. You can also ask those questions at our website, kojoshow.org or send us a tweet @kojoshow. Where are the hotspots likely to be located? If I wanted to play poker from home, would I be able to?

  • 12:44:16

    BROWNYou absolutely would be able to play from home. You could also play probably, I imagine, in hotels and certain restaurants downtown and some of the part of the core areas of the city. But yes, you will absolutely be able to play in the comfort of your own home.

  • 12:44:29

    NNAMDIWhat kinds of technological measures will the city be taking to make sure people outside the District won't be able to access D.C. online poker?

  • 12:44:37

    BROWNOnly because I'm not a technical engineer so I can't answer (laugh) in the kind of way you probably would like, but the technical -- technology does exist where you can keep it within the borders. Keep in mind, Kojo, people are playing online poker today as we speak and have been for the last couple of years. It hasn't -- it's not being regulated. We cannot get fees from it. Now, we can regulate it and we can get fees, so it's kind of a good, good story for the residents of the District of Columbia relative to increasing revenue.

  • 12:45:06

    NNAMDII'm thinking of people who live in Takoma Park, D.C. How do they know that their neighbors in Takoma Park, Md., aren't honing in on this?

  • 12:45:12

    BROWNExcellent, excellent point. And that's where the technology will have to get tweaked 'cause it's not just Takoma Park on Eastern Avenue, it's also Western Avenue, it's -- all the big border streets, because within 500 feet or so, there could be some issues, but the technology people will work on it and I'm sure it will get fixed.

  • 12:45:27

    NNAMDIFormer D.C. Attorney General Peter Nickels recommended that before online gaming was legalized, it should go under legal review. Has acting Attorney General Irvin Nathan done such a review?

  • 12:45:39

    BROWNWell, I'm not sure. I did -- I never -- I didn't understand what Attorney General Nickels was talking about. The issue is, is there a federal prohibition against it, and there is not. And so, we -- our council counsel has talked about it, the Justice Department, because as you know, there are -- other jurisdictions are trying to do this, New York, New Jersey, Illinois and several others, and the Justice Department has decided to stay out of it. So there are no legal hurdles about this. It's now legal. We can regulate it here in D.C. We can get the revenues from it.

  • 12:46:09

    NNAMDIIsn't there a federal law that currently bans federal banks and credit card companies from paying online gambling institutions, and how does D.C. plan to get around that?

  • 12:46:19

    BROWNIntrastate. As long as it is done intrastate, within the borders of the District of Columbia, that's where that law does not apply.

  • 12:46:26

    NNAMDIOh, if it's done interstate...

  • 12:46:28

    BROWNIntra. Right.

  • 12:46:28

    NNAMDINo, if it's done interstate, it's illegal.

  • 12:46:30

    BROWNCorrect.

  • 12:46:31

    NNAMDIIf it is done intrastate, within the borders, people can use credit cards and credit cards connected to banks.

  • 12:46:36

    BROWNCorrect.

  • 12:46:38

    NNAMDIHere is Brian in Kensington, Md. Would you don your headphones please, councilmember.

  • 12:46:42

    BROWNAbsolutely.

  • 12:46:44

    NNAMDIBrian, you're on the air. Go ahead, please.

  • 12:46:46

    BRIANI'm just wondering if, where the revenue from this is going.

  • 12:46:51

    BROWNWell -- I'm sorry...

  • 12:46:52

    BRIANAnd if it's anything like Maryland, where it's funding education, I wonder why they decided in -- with so many, you know, minority residents in the District, why they've decided to -- 'cause I don't agree with it in Maryland either, that they use this as a measure of revenue when it's completely recessive. It's taking money out of the pockets of the people who can least afford it, to fund the education process, which is, you know, essential, hopefully, to keep people from actually gambling and perpetuating their situation.

  • 12:47:28

    NNAMDIWell, actually Brian, you raised two aspects of it, and by implication, three aspects of it. I'm gonna raise the implied aspect of it first, and that is how much money is this expected to raise, and then we'll talk about where that money is likely to be going, and then your opposition and those of others to the whole notion of gambling, because it feels it exploits the people who can least afford to. D.C. Financial Officer Natwar Gandhi's office has projected the city's deficit for fiscal 2012 to be around $322 million. His office estimates that by 2014, internet gambling could earn the city around $13 million. Seems like a relatively small slice of a big pie.

  • 12:48:07

    BROWNYeah. I'd like to call it gaming, if you don't mind, Kojo.

  • 12:48:09

    NNAMDII'm sorry. Gaming.

  • 12:48:10

    BROWNThe...

  • 12:48:11

    NNAMDIGaming. Gambling.

  • 12:48:11

    BROWNNo. The numbers are small.

  • 12:48:13

    NNAMDITwo letters.

  • 12:48:13

    BROWNWe wanted to be conservative when we worked with Dr. Gandhi on it. And there was no way to track it, Kojo, too, 'cause it's never been done before. It's hard to put a number on something that's never been done before. Actually, we were extra responsible fiscally because we did not book any of that revenue for 2011. We knew it would be a ramp-up year and so we wanted to see what would happen. But in those out years of 2012 and beyond, we're expecting numbers much larger than that. That was just, again, we just wanted to be as conservative as possible.

  • 12:48:39

    BROWNThe numbers will -- the money or the revenue will go to the general fund. We didn't have any -- for lack of a better term, I'm not using the term earmark. I'm just using it 'cause I think folks understand. It was not earmarked to go anywhere in particular. Go to the general fund, to the bottom line for the District residents to use for revenue. And then his concern, which is a legitimate one, about gaming. But, you know, we have lottery here and, you know, lotteries are in 45 of the 50 states people are playing and gaming all over the country. And also, we have a competitive issue, too, Kojo. We have to do something.

  • 12:49:13

    BROWNWe are watching just busloads of people every day going to West Virginia, Delaware, Maryland, to play other kinds of games. We had to do something here. And we're gonna put a lot of controls. We're gonna have educational efforts. The Lottery Control Board is gonna have educational efforts about the dangers of gaming. So we're gonna do everything we can to make sure that we don't hurt anybody in this process.

  • 12:49:31

    NNAMDIAnd it is my understanding that this will be run by Intralot, the same company that runs the DC Lottery. And some people are saying, well, this is an international company. It's a Greek-based company. Why not try to find a local company?

  • 12:49:43

    BROWNWell, there is, actually is a local company that's in partner with Intralot. So that piece is already done. And, actually, it's the first time that a D.C. minority-owned company is the majority partner. So, in fact, that may be true, but it is a local company that is partnered up with Intralot.

  • 12:49:59

    NNAMDIBryan, the other issues you raised were, where the revenue is going? He answered that. And, of course, the always ongoing issue of who's going to be gaming? And he talked about the competition we're getting from other jurisdictions. So, hopefully, his answers met with your satisfaction. So we move on to Jay in Washington, D.C. Jay, your turn.

  • 12:50:18

    JAYHi. Thank you, Kojo. I may have misunderstood, and I apologize. I understand that there already is a company that has been assigned the rights to deliver the Internet gaming. Or will local entrepreneurs also be able to, for instance, set up their own server and provide Internet gaming services inside the District of Columbia? And following up on that, will those entrepreneurs be able to integrate other entrepreneurs who can set up gaming facilities in their own restaurants? And what will be the process to, like, get a license to have a computer setup in your bar, for instance, where somebody can game?

  • 12:51:07

    BROWNFirst, thank you very much, Jay, for your questions. First, the answer is no. Entrepreneurs will not be able to set up their own. They can go through the -- they'll have to go through the existing vendor with the Lottery Control Board here in the District of Columbia. But, yes, the opportunities will exist for the restaurant owners and the hotels. Obviously, they will have an opportunity to obviously make money on this particular enterprise, and that's a good thing. So the answer to the first part is no. Second part, yes.

  • 12:51:35

    NNAMDIThe no sounded like a qualified no, and that is that these entrepreneurs will apparently be able to try to go through Intralot in order to become licensed in some way or the other, or go through the local...

  • 12:51:48

    BROWNWell, I'm not sure how exactly they'll have it set up, but they -- I don't even know if they'll start with Intralot. I think they have to start with the Lottery Control Board here in the District of Columbia. That's really the overseeing body that regulates lottery and game playing here in the District of Columbia.

  • 12:52:00

    NNAMDIThank you very much for your call, Jay. Though Congress has let this legislation past a 30-day review period, House Committee on Oversight and Government Reform spokesman Frederick Hill has said this will not necessarily stop Congress from acting if it develops legal concerns. Are you concerned about congressional intervention? The direct quote from Frederick Hill is, "If the committee has a concern that a practice is either illegal or not in the interests of," here it comes, "the federal taxpayers who support the District of Columbia, the committee could certainly raise a concern."

  • 12:52:33

    BROWNWell, you know what? The committee can raise a concern, a variety of different things. Everything we do, as you know, Kojo, goes up to the Hill for review and/or for certain members of Congress that would like to frankly put their nose in our business. Hence, why we sat down in the middle of Constitution Avenue the other day and got arrested and protested our lack of independence here in the District of Columbia. So, Kojo, we can't lose sleep over that. They can do anything they want with any of our legislation. That's ridiculous. We should have budgetary autonomy, legislative autonomy and, frankly, we need to be a state, and that would end all of this.

  • 12:53:04

    NNAMDIHere is Andrew in Arlington, Va. Andrew, you're on the air. Go ahead, please.

  • 12:53:10

    ANDREWHey. I had a quick question. So when I play online poker at my home computer in Adams Morgan, does that technically mean I'm committing a crime?

  • 12:53:22

    BROWNThe answer is no. We'll get you some, a little clarification on that. It's the companies that are operating unregulated in our city that's the concern. But, no, you are not in jeopardy. We would like for you to play, obviously, on the District's controlled site, because then it is regulated and then you're totally safe.

  • 12:53:42

    NNAMDIAnd what...

  • 12:53:42

    ANDREWOh, okay.

  • 12:53:43

    NNAMDI...what other motivation should Andrew have? What other motivation will you be able to come up with for people who are already gaming in the District of Columbia to game on the District of Columbia's site?

  • 12:53:55

    BROWNWell, what I'd like Andrew -- you said -- Andrew, I think you said his name is.

  • 12:53:58

    NNAMDIYep.

  • 12:53:58

    BROWNWhat I'd like for Andrew and other folks that are playing already here in D.C. is that if you play under the D.C. lottery site, you're contributing to the bottom line and contributing revenue to the city. When you play on those other sites, you are not. You're just contributing to somebody's pocket who lives far, far, far away from the District of Columbia.

  • 12:54:16

    NNAMDIThank you very much for your call, Andrew, and good luck to you. We got a comment...

  • 12:54:21

    BROWNDid you mean good luck next time he plays and you hope he wins or…?

  • 12:54:24

    NNAMDIWhatever way Andrew decides to interpret that is how I mean it. We got a comment on our website from Sterling. "How would one account for any income tax ramifications that could result from winnings? Also, how would the District get its portion of revenue in games like poker where players are playing against one another and not the house?"

  • 12:54:43

    BROWNIt's, again, two -- several good questions. The -- a lot of the...

  • 12:54:47

    NNAMDIYou'll find out how much Michael Brown knows about gambling -- gaming right now.

  • 12:54:50

    BROWNA lot of the implementation side -- my job is the legislator. I got the law passed to make sure it was legal. On the implementation side, they should contract the Lottery Control Board. They will have all the answers to those questions for him.

  • 12:55:02

    NNAMDIAs concerns the person who raised the issue of gaming, there are others who are concerned about gambling addiction. Does the District have a plan in place to ensure that people with gambling problems can receive some help?

  • 12:55:17

    BROWNAs a matter of fact, the local vendor has discussed that. The Lottery Control Board have -- has discussed it. I've discussed it with them about putting some new education and control procedures in place. We obviously wanna make sure folks who are under aged are unable to get online. We wanna make sure that folks have proper education so they understand the dangers of gaming. So, yes, they will be putting together that campaign, along with the regular marketing campaign, to let folks know about the dangers.

  • 12:55:42

    NNAMDIAnd we have a call from Bill in Bethesda, Md., who, I think, is trying to provoke some controversy. Bill, you're on the air. Go ahead, please.

  • 12:55:51

    BILLOkay. I'd like to just say that I think it's wonderful that the District is going to sponsor legitimate gaming. And I wish they were gonna use the money, as all people, who -- in all states and entities that use gaming revenues, use it for education, because, that way, you could take the money from the stupid people who are involved in gaming and use it to educate other people so they wouldn't be involved in gaming. That's it. Thanks.

  • 12:56:16

    NNAMDIWell, people who are involved in gaming are, of course, not necessarily stupid. They have disposable income, we hope, that they can, in their view, invest in gaming at this point. And as Councilmember Brown said earlier, if people do have gambling addiction issues, there are plans in place to make sure that those people can receive some help. If D.C. residents object to a hotspot in their own neighborhood, a NIMBY attitude towards hotspots, how can they make their feelings known?

  • 12:56:48

    BROWNWell, I think in -- like in anything else, any other piece of legislation that's passed and turned into law, we have some of the most active residents of any city anywhere in America. They will make it very clear. As you know, a lot of folks didn't like the 5-cent bag tax. We heard about that. So we heard -- we hear it all the time, you know, through the ANC commissioners, the civic association leaders, the community leaders. They call our office. They email us. So, you know, that's part of the job. Not everyone is gonna like every law that's passed here in the District, and we just hope that we keep a majority of the folks happy.

  • 12:57:17

    NNAMDIOne of the reasons we wanted to have this conversation is that people who see these reports say not only, A, when is it likely to happen, but is it likely to happen at all? This is going to be happening for sure?

  • 12:57:27

    BROWNWell, it looks that way. We -- again, they're gonna start introducing the free opportunities in the mid part of the summer. And then towards the end of the year, it goes really live. So I think the answer is yes. That's why you're also seeing, Kojo, these other states that were trying to do it. I think now they're gonna put theirs on a fast track. Now that they see that the District of Columbia got it done, you will see several jurisdictions, I think, around the country doing it as well.

  • 12:57:49

    NNAMDIWanna place any bets on when it's likely to happen? We're talking with -- Michael Brown is an at-large member of the D.C. City Council. He introduced the new law, which will allow online gambling in Washington, D.C. Michael Brown, thank you for joining us.

  • 12:58:01

    BROWNKojo, thank you for having me.

  • 12:58:03

    NNAMDIAnd thank you all for listening. I'm Kojo Nnamdi.

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