US Racing Comes out on Top

While most of the Internet gambling industry mourns the passage of the U.S. Unlawful Internet Gambling Enforcement Act, racing, at least in the short term, appears to be in good shape.

As with most incarnations of U.S. federal prohibition legislation, the bill headed for the President's desk includes a carve-out for racing. Specifically, the bill excludes from the definition of unlawful Internet wagering, "any activity that is allowed under the Interstate Horseracing Act of 1978, as amended."

The bill also contains a "Sense of the Congress" provision stating that the new law is not intended to change the relationship between the Interstate Horseracing Act and other federal statutes presently in effect, thus maintaining the status quo.

In a statement released on Monday, the American Horse Council (AHC) said the most important aspect of the bill is that it leaves the Interstate Horseracing Act intact.

"The bill protects racing by maintaining the status quo with respect to racing's interstate wagering activities under the Interstate Horseracing Act," Jay Hickey, president of the American Horse Council, said. "Many members of Congress, including Sens. Mitch McConnell, Jim Bunning and Jon Kyl, and Reps. Bob Goodlatte, Jim Leach and Mike Oxley, have fought hard to protect the industry and our right to offer wagering pursuant to the Interstate Horseracing Act of 1978."

The AHC further stated that the bill protects the American horseracing industry because it outlaws wagering with off-shore companies, including those that have been accepting bets on horse racing but providing no revenue to the industry.

"We are pleased that the final legislation continues to recognize racing's unique status under the Interstate Horseracing Act," Hickey said.

The American horseracing industry has contributed millions of dollars to primarily Republican Congressional candidates over the last few years.

According to the Center for Public Integrity (CPI), which conducts ongoing investigations into the state of federal lobbying in the U.S., California online race betting and content provider Youbet contributed $1,450,000 to lobbying efforts between 1998 and 2004. The CPI also reported that the National Thoroughbred Racing Association (NTRA) contributed $960,000 during the same period, and California racecourse owner and operator Magna Entertainment Corporation gave $460,000.

Another Web site that tracks political contributions, Opensecrets.org, revealed in August that the NTRA gave $10,000 to Republican Bob Goodlatte's race for Congress in 2004. Goodlatte (along with Rep. James Leach) championed H.R. 4411 (the Internet Gambling Prohibition and Enforcement Act) in the House, where it passed in July.

Opponents of prohibition, meanwhile, are hoping to generate a new wave of campaigns for the legalization and regulation of online gambling in the U.S., and they have found a ray of hope in the success of the racing lobby.

"The horse racing industry is not afraid or ashamed of saying that they were able--for want of a better word--to buy their exemption from the new laws," Michael Bolcerek, president the Poker Players Alliance, said.

Greg Avioli, the NTRA's head of legislation, said at a horseracing symposium last year in Arizona that a ban on Internet betting on horse racing was "an over-our-dead-body issue" that would jeopardize too many livelihoods.

"We're fairly confident we have the political strength in Washington to stop that, because this $40 billion agribusiness now lives and breathes on that [Internet gambling] revenue," he said at the time. "So we've got friends in Washington and I don't think they can pass a law over our objection."

Avioli is, of course, pleased to have won the exemption from the prohibitive Internet gambling bill.

"This is a very significant landmark recognition by the U.S. government of our industry's legal right to conduct wagering under the IHA and of our industry's important position as an agri-business that supports 500,000 jobs," he said.