November was rife with media stories profiling celebrities that have been recruited by ad agencies to push the envelope and further promote a variety of popular on-line gambling web sites. Each article underscored the multi-million dollar budgets these companies have, and how they are just beginning to flex their muscles with a blend of place-based and in-media strategies. And each article also pointed to the potential illegality of these celebrities participating in these ads, implying that mid luminaries such as former Governor of Minnesota Jesse Ventura (promoting BetUS.com), comedian/ celebrity Tom Arnold (BetOnSports), Hollywood actor James Woods, Football Hall of Fame’s Jim Kelly, and even basketball legend Shaquille O’Neil are all potentially goint to follow in the path of online gambling pioneer Jay Cohen, who served 30 months in prison for promoting one of the first sports betting sites.
But wait. If those individuals are are in the government cross hairs, what about those that are running the biggest banks and investment funds on Wall Street?? According to the front page of today’s NY times, its not just about celebrities. Today’s story profiles the real players that are underwriting this multibillion dollar industy, and one that has sigificant impact on some of us in the advertising and sponsorship world. As the song goes, its “Its all about the money!”
Goldman Sachs, Morgan Stanley, Merrill Lynch,Citigroup and the most influential investment funds, including Fidelity, are spotlighted for underwriting, financing, and or owning large stakes in many of these off-shore based “illegal” enterprises that have since seen their shares flourish on international bourses, including the London Stock Exchange. Does this mean that former Treasury Secretary Robert Rubin, now sitting on the Board of Directors of Citigroup is going to be prosecuted for aiding and abbeting an illegal enterprise?
PartyPoker is a company that rakes in millions every day, and has built a global brand image. And that success has not been lost on Wall Street bankers that have figured out how to circumvent the byzantine laws that Federal prosecutors insist on enforcing, and who continue to impose the threat of prosecution to keep advertisers from promoting sites that are predominately visited by US citizens (industry research suggests that 70% of the visitors to these sites come from within the US).
To illustrate the point, PartyPoker’s media buyer, Barry Markowitz of Earthquake Media recently told me that he is aggressively trying to overcome a big ad placement challenge for his client: it seems that mainstream media insists on making a differention between advertising the company’s “.net” and “.com” sites. The “.net” site is the “G” rate version; only Monopoly money is used here, the “.com” site is where the real action takes place, and links from the “.net” site to the “.com” are as plain as the smirk on George W.’s face when asked about WMD’s in Iraq.
I spoke to Barry in the course of pitching him on PartyPoker sponsoring a major consumer auto show (750,000 attending in a 10-day run)–the audience is 70% 21-49 yr old males, with average income of 100k+. A no brainer for Barry, who merely wanted to know who to make the check out to. When I went back to secure approval from the show’s promoter, she winced when I explained who the advertiser was. I pointed to the fact that Times Square was about to be lit up with advertising from a similar company, and recited the major cable TV channels that are facilitating the exact same thing, all in connection with broadcasting poker tournaments. It didn’t take the show’s sponsorship consultant to reply with “How much is in it for us?”.. When I gave her the number, she said that she’d “have to get final approval from the show’s producer.” Two days later the message came back, “Sorry, we can’t do it. The producer was on the fence about the legal issues, but if the client would pay more, I’m sure we could swing it.” American ingenuity at its finest.
The legal issues surrounding internet gambling are no doubt complex, but are obviously driven by political agendas. Obviously advertisers are feeling the sting. By the way, these laws aren’t being enforced because of heavy lobbying from the brick and mortar casino industry in Las Vegas; those guys are now strong advocates of online gambling and have invested millions in yet-to-be-unveiled internet sites, and are merely waiting for the winds to shift in Washington. Even though I prefer the glitz and glamour of Vegas, the fact is, tens of millions of Americans are wagering on line, along with tens of millions of non-US residents. This is an $8 Billion a year juggernaut, and getting bigger every month. And the smartest investors in the world aren’t going to miss out on the opportunity.
Contrary to the prurient mindset of a select group of self-righteous politicians who have no trouble violating the Constitution if it serves their moral agenda, prohibition-esque and outmoded regulations have no place in today’s world. Threatening, imprisoning, or even torturing those that are merely suspected of aiding or abetting purported terrorists, or knowingly violating the US Constitution and the privacy rights of US Citizens in an effort to ‘protect the other citizens’ is one thing. But using the same resources and similar tactics against advertisers that are facilitating global brand names? Give us a break.
If Time Magazine gave an award for Hypocrite of the Year, you know who I would nominate. We’re living in a country where 18 year olds, who don’t have the legal right to smoke or buy beer, can be sent off to fight and die in a god forsaken foreign country that supposedly harbors WMD’s and is alleged to be the centerpoint for world terrorism. There’s a reason why its called “world” terrorism. Terrorism is everywhere, and there is no ‘centerpoint’. Certainly its not in Iraq, and one can argue that Saddam Hussein wasn’t a ‘terrorist’, but simply another in a long line of despotic rulers that happened to kill millions of his own countrymen. And, by the way, what we are doing in Iraq is merely pouring gas on the fire of terrorism, NOT extinguising it. If we must send teenagers off to fight in a place that harbors terrorists, why not send them to France, instead of Iraq? Donald Rumsfeld could actually carry a weapon and lead the charge, instead of making appearances to dish out lobster on Chirstmas day in the desert, and I can see Condi Rice in fatigues, while shopping for shoes in Paris. .Doesn’t the government have anything better to do than to use the threat of jail on advertisers that are merely promoting what Wall Street is undewriting?? Or maybe the US government should put everyone on Wall Street in jail, but not before Dick Cheney can sell his stock in Halliburton