Is a Confrontation looming Between the DOJ and the Industry?

A Financial Times article points to a legal wrangle developing between the horseracing industry and US enforcement authorities. The article reports that visitors to Twinspires.com, a website operated by the owners of the Kentucky Derby, are offered a reassuring message about whether online gambling on horses is legal.

Twinspires says it operates legally in the US, citing legislation passed by Congress last year that toughened federal anti-gambling laws, while protecting companies that run internet bets on horses from the new rules. “What Twinspires and several other websites fail to disclose is that the US Justice Department disagrees with this assessment,” the newspaper observes.

The Financial Times report points out that in a letter to a senior lawmaker seeking clarification on the status of online horse betting, the Justice Department said its long-held view – that interstate betting on horses online was illegal – had not been affected by last year’s passage of the UIGEA.

The DOJ letter opined that this law was targeted at foreign online gaming companies and explicitly stated it was not “intended to resolve any existing disagreements over how to interpret” federal laws on online horse betting. However, its exclusion of online horse betting was seen by some industry observers as a way for Congress to protect the domestic gaming industry by keeping some rules intentionally ambiguous.

At the centre of the legal wrangle between law enforcement officials and the industry is a dispute over whether a year 2000 amendment to the Interstate Horseracing Act (IHA), which legalized online pool betting in some states, trumps federal criminal laws that prohibit interstate gambling, claims the FT article. The article goes on to summarize the positions of the industry.

It does not appear that the DoJ’s opinion is causing concern and points out that the willingness of established companies to defy the Justice Department possibly highlights the industry’s confidence that it has the upper hand in its analysis of the law.

“The IHA sets forth that this is legal,” says the VP of national public affairs at Churchill Downs, which owns Twinspires.com. “What we do is look at the law...The voice that matters is, in fact, Congress.”

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