USA Too much confusion over the legality of horse racing carve-outs
The notoriously complex legislative position regarding online gambling in the United States has prompted two members of the House of Representatives to launch a bill seeking to clarify the legality of online pari-mutuel horserace wagering.
Clarification has assumed increasing importance since the implementation of the Unlawful Internet Gambling Enforcement Act, with its attendant risks of financial institution over-blocking.
The bill, titled HR5599, the Wire Clarification Act is a bi-partisan effort and the work of New York Democrat Scott Murphy and Kentucky Republican Brett Guthrie. It appears to be largely motivated by the position of the horse racing industry, which has wrestled on a number of occasions with the US Department of Justice over the legality of its online gambling legislative carve-outs.
“Horseracing is at the heart of our local economy,” Congressman Murphy told reporters this week. “It brings much needed revenue and is responsible for thousands of local jobs.
“When the Treasury Department and the Federal Reserve created new rules governing Internet gambling transactions, credit card companies felt that it was no longer safe under the 1940’s-era Wire Act to accept online transactions on pari-mutuel betting, an essential component of the racing economy.
"Now the rules are hampering an essential stream of revenue from flowing to the racing industry.”
Congressman Guthrie said that the legalization, if passed, would provide definitive clarification that the Wire Act and other similar statutes are not applicable to regulated activities under the Interstate Horseracing Act. That clarity will relieve credit card companies from the constant threat of prosecution and assure them that there is no need to block legal online pari-mutuel wagering as authorised by the Interstate Horseracing Act.
Murphy revealed that online pari-mutuel wagering on races from Aqueduct Racetrack, Belmont Park and Saratoga Race Course totalled approximately $210 million last year, which contributed around $18.5 million in revenues to the New York Racing Association. He revealed that the US domestic horseracing industry is worth about $39 billion and sustains 1.4 million jobs, while lawful wagering via the Internet represents a substantial portion of the total funds bet on the sport.
