"A Hassle Over Web Wagering"

For many years if horseracing fans wanted to place wagers, they could only do so if they were actually at the racetrack. Now however, all of that has changed. The Interstate Horseracing Act of 1978 now allows bettors in one state to gamble on horse races across state lines. The Act has led to an explosion of horse races that are now being simulcast across the country. Account wagering became the fastest growing sector of thoroughbred racing when the Act was amended in 2000 so as to also allow Internet wagering. Last month’s Kentucky Derby is a primary example. The derby was a windfall for all of those companies that now allow people to place bets from their television sets or over their computer. Concerns that definitely benefited are TVG, a horseracing network, which takes wagers over the phone or through the Internet, which processed 6.4 million dollars on Derby Day and Yourbet.com which processed 4.2 million dollars. Both of these amounts represent industry records for a single day of betting.

This apparently rosy picture for online pari-mutuel betting however, isn’t exactly a sure thing. That is because of the current legislative activity on Capitol Hill with regard to online gambling along with the World Trade Organization’s finding that US policy on Internet horserace wagering is in violation of fair trade practices.

As regards the activity on Capitol Hill, the main concern is with a new bill that has been introduced by Arizona Senator Jon Kyl. The bill is directed at preventing credit card companies and banks from processing funds for illegal online betting concerns. The immediate problem is that the bill does not include an exemption with regard to the racetracks as have previous bills also attempting to curb online gambling. This is not the first time that Kyl has attempted to introduce legislation to Congress with regard to online betting, but in the past all of his previous bills have failed. Other members have also introduced bills in the past that attempt to curb the online gambling industry but these bills have also failed. Kyl’s latest bill has the advantage, however, of not exempting racetrack wagering. Since it includes no exception for racetrack wagering, the bill does not conflict with the WTO ruling.

Associate coordinator of the University of Arizona’s Race Track Industry Program, Steven Barnham, explains that because the present Interstate Horseracing Act permits the United States to allow companies such as XpressBet, TVG, Yourbet and others to take wagers from U.S. bettors the WTO found it to be problematic. In addition, online casinos not based in the United States are not given the same access to these bettors.

Barnham when asked what the result of this might be, stated that he did not know for sure, but feels that the issue is probably ripe for congressional debate and possibly action. Commenting on the WTO decision, U.S. Trade Representative, Peter R. Allejeier commented that the United States needs to clarify this one narrow issue of Internet gambling on horse racing. Executive vice president of the National Thoroughbred Racing Association Gregor Avioler, points out that the WTO decision really does put a lot of these issues in the forefront.

A small but expanding portion of the racing industry will be significantly curtailed If the United States does end up prohibiting all types of betting from remote locations, including account wagering on racetracks. The National Thoroughbred Racing Association claims that approximately one-fifth or three billion dollars of an estimated fifteen billion dollars will come through account wagering. More than half of that, they say, will be bet online.