Brennan’s Bet: From PASPA Fighter To Industry Fixer

Joe Brennan Jr. isn’t walking away from sports betting. He’s just changing seats on the rocket ship he helped launch.

The man who was part of initiating the federal lawsuit in 2008 that eventually led to the Supreme Court striking down PASPA in 2018 — paving the way for legalized sports betting across America — has stepped away from his operational role in the industry. But he’s far from done with the world he helped create.

“I’m not on the board. I don’t have an executive position,” Brennan explained to Casino Reports regarding his late-February exit from Prime Sports (though he maintains an ownership stake in the sportsbook). “I started this back in November of 2008. And there’s a few ways that the industry developed that were not anticipated.”

That understated observation comes from someone who’s seen the industry evolve from its infancy through its adolescence to what he now believes are its critical teenage years.

Growing pains

Brennan identifies three major challenges facing sports betting in America today — challenges he’s now dedicating himself to addressing.

First is the liquidity problem. According to Brennan, for every dollar wagered in regulated markets, the American Gaming Association now estimates two dollars flow through unregulated channels — a ratio that’s worsening, not improving.

“It’s not in the public’s interest to have a massive unregulated marketplace offering the same product alongside the product being offered in a regulated place,” Brennan said. “It undermines the regulated market. It undermines the public’s confidence. It creates more opportunities for integrity problems.”

The second challenge: responsible gambling practices — or the lack thereof. Brennan points to excessive marketing and bonus offers as examples of the industry “injuring itself.”

“It’s not enough to just have 1-800-GAMBLER up on your site,” he said, “and I say that as somebody who has 1-800-GAMBLER up on their site. You want to do more.”

But perhaps most immediate is the taxation issue. As states like New Jersey (proposing 25% of GGR), Illinois (variable rates up to 40%), and Ohio (suggesting 40%) look to increase tax rates on sports betting, Brennan warns of unintended consequences.

“If New Jersey suddenly starts to approach parity on gaming taxes with its neighbors, remember that there isn’t a survey out there that doesn’t have New Jersey being in the top five, if not the actual top spot of the most expensive states to do business in,” Brennan sad. “If they do something like this, where they substantially increase the gaming taxes, and we look at our overall costs in New Jersey … we’ve got to say, what’s the minimum number of regulatory-demanded job positions that we have to have here?”

The implication is clear: Excessive taxation could drive jobs and innovation out of the very states that pioneered legal sports betting.

This taxation issue connects directly to another threat Brennan sees on the horizon: prediction markets like Kalshi that operate under CFTC oversight rather than state gaming regulations.

“It’s one more reason why the states have to watch out that they don’t try and over-milk the cow,” Brennan said. “If this winds up standing at CFTC and these prediction markets are allowed to grow, the whole notion that like, ‘oh well, the product’s limited today’ — there will be everybody under the sun lining up to help them find ways to innovate.”

As traditional sportsbooks feel increasingly squeezed by state regulators, Brennan believes they’ll seek alternatives — just as we’ve already seen with sweepstakes models.

“If regulators and states, lawmakers are going to continue to make this harder and harder, we’re going to find ways, legal ways,” he said. “Even if it’s gaming the loopholes — and if there’s one thing that seems to be a real American talent, it’s gaming the loopholes.”

Solution time

Brennan isn’t just identifying problems — he says he’s developing solutions, though he’s deliberately coy about specifics.

“When I say I started thinking about this a year ago, it’s not like I sat there a year ago and said, ‘From a sports betting perspective, how many angels fit on the head of a pin?'” Brennan said. “I have concrete notions, and I’ve already set a few things in motion.”

His approach is refreshingly methodical in an industry often defined by its breakneck pace. Rather than rushing to market with a pre-baked solution, Brennan is taking time to listen — really listen — to stakeholders across the ecosystem.

“I’m committed to reaching out, to have conversations, and really to force myself to listen rather than talk to people in the industry — and in particular, players,” Brennan said. “I really want to hear it from players up and down the spectrum, you know, pros to Joes.”

Finding a better way

Brennan isn’t just pointing fingers. He’s searching for what he calls a “third way” — solutions that don’t just rely on government or market forces alone.

“Government’s probably the lever of last resort for enacting changes,” Brennan said. “There’s got to be commercial market levers to look for. Are they innovations? Are they new products, new processes, new services?”

This perspective comes from someone who’s been in the trenches at every level, from lobbying to running a sportsbook.

“I think I just have a unique experience because it’s across the spectrum, starting at the beginning with the lawmaking, lobbying, all of that advocacy, to operating,” Brennan said. “Not everybody goes that path.”

What’s next?

While he’s keeping the details close to the vest, Brennan is clearly focused on practical solutions rather than just talk.

“You have to have a bit of humility when you’re thinking about these things,” he said. “I constantly talk about being a good shepherd. A shepherd is not out there driving the sheep. The sheep have to follow him.”

For an industry that’s growing at warp speed, Brennan’s measured approach brings a welcome change. After all, this is the guy who spent more than a decade fighting to make sports betting legal in the first place.

The challenges he’s tackling now might be even tougher — balancing the needs of players, operators, and regulators in a rapidly changing landscape.

“There’s a lot of states since then that have opened, that have legalized, where it’s far less expensive to do business,” Brennan points out, highlighting just one piece of the puzzle he’s trying to solve.

And make no mistake: Brennan isn’t stepping away from the industry to take it easy. He’s gearing up for his next fight.

“I tend to over-traumatize and I’m like, ‘I’m a wartime consigliere. I’m not a peace one,’” he said. “So I have to go find a fight, you know? I just crossed the street to get into a fight and I guess that’s what I’m going to do now.”