"This Could be the End of Horse Race Betting on the Net"

In Arizona, Senator John Kyle is responding to the World Trade Organization’s current decision regarding the case brought against the U.S. by the tiny island nation of Antigua. He is introducing his own bill on Internet gambling. Kyle’s bill is entitled The Unlawful Internet Gambling Enforcement Act. It is a response to the World Trade Organization’s ruling in which the United States policy with regard to Internet gambling is viewed as being in violation of the World Trade Organization’s General Agreement on Trades and Services. In addition, the WTO supports Antigua’s claim that the Interstate Horseracing Act, legislation permitting the use of the Internet for making bets between states on horse races, is discriminatory vis a vis foreign Internet gambling operators. This Interstate Horseracing Act therefore stands as an exception to the United States Government’s overall stance that Internet gambling is illegal. Senator Kyle’s bill contains a clause that makes it illegal for banks, credit card issuers, and other financial institutions to enter into any kinds of transactions relating to online gambling, and is designed to target all forms of Internet gambling. In fact, this legislation makes no exception for Interstate horseracing or for that matter, any form of Internet gambling. This makes the Kyle bill more unfettered in that it is directed at making all forms of Internet gambling illegal. If there were to be exceptions placed on the bill, then the World Trade Organization’s ruling that it is in violation of the World Trade Organization’s General Agreement on Trades and Services would still stand, and in addition, other gambling providers like Indian tribes and lotteries, could also start demanding exceptions. Within the context of the Internet Gambling Enforcement Act, a wide range of federal and state law enforcement agencies would be authorized to pursue those in violation of Internet gambling laws.

According to Tony Chabot, a lawyer with the firm of Lewis and Roca in Lose Vegas, which represents several Internet gambling clients, Senator Kyle’s bill, would be a very effective way to get the United States government to abide by the WTO ruling as well as its trade agreements. He is reported as stating that this new bill being submitted by Senator Kyle bill will serve as an effectual means for successfully shutting down any form of interstate betting that might utilize the services of a financial transaction service provider. He also maintains that the horseracing industry has been increasingly dependent on interstate betting to remain viable.

The National Thoroughbred Racing Association (NTRA), reports that in total during the previous year, wagering on United States races dropped about half a percentage point to just over $15 billion. They add that in the absence of the option to bet on the Internet, the total amount of wagering would have been appreciably less.

Greg Aviolier is the executive vice president of the National Thoroughbred Racing Association. He is reported as expecting Internet wagers on horse races to reach a total of $3 billion for this year. Aviolier says that wagering online, represents by a significant margin the fastest-growing area of the business. While Mr. Aviolier states that his association is paying close attention to this bill, they are sure that Senator Kyle and the other Senate members, are not wanting to interfere with legal pari-mutuel betting. It is his belief that whatever legislation might be posed will sufficiently protect racing.

Although the many other bills that have been put forth by state senators in the past have failed, this should not be taken as an indication that this present bill being submitted by Senator Kyle, is destined to failure. First of all, this bill represents a much more pointed approach to the problem in that it doesn’t contain exceptions directed toward different gambling venues, as in all of the previous bills. In addition, it should be noted that Senator Kyle is one of two Repaublican senators for Arizona, and that the Republican Party is very much the prevailing party in the government. At this point in time they are able to exercise significant control and power over the Congress. Also note that this parry is under the influence of the religious right-wing which is known to favor anti-gambling legislation.

Nevertheless, the horseracing industry does not lack its own political strength. It may start flexing its own political muscle soon. Publisher Sue Schneider of the Interactive Gaming News, notes that the industry has been experiencing denial with regard to the actual dangerous that are posed by the Kyle bill. She also points out however, that if they choose to do so, they can put up a good fight. She also notes that the industry as a whole is starting to wake up to the threat posed by the Kyle bill.