Legality of Internet-Based Race Wagering Challenged in Ohio

The Ohio Racing Commission and Ohio Attorney General Betty Montgomery are trying to put a stop to the operation of an Ohio-based, arguably legal Internet race wagering service. As a result, Ohio TAB, the company that offers the service, is considering packing up shop and heading west.

In November, the Commission, acting on a request from Ohio Attorney General Betty Montgomery, ordered Winticket.com, an Internet race betting service and waited for her to rule on its legality.

In the meantime officials with the Ohio TAB, which runs and operates the site out of Beulah Park racetrack, sought an injunction to keep the site operating until such the ruling is made.

Earlier this month, Ohio Common Pleas Court Judge John Bessey ruled, on grounds that the company wasn’t given due process, that the site could remain operational.

It's unclear whether Montgomery will pursue the matter further, but that might be irrelevant, as Ohio TAB general manager Todd Bowker says the company is planning to pack up shop and move to friendlier territory.

"We have a hearing set for early February to get the final approval to be licensed in Oregon," Bowker said. He acknowledged that the decision to move was brought about by the recent troubles between his company and the racing commission.

"We decided we will go to a state that is more favorable towards account wagering," he said. "The tax laws are more favorable, and we will be given the stamp of approval before we even set up shop."

If everything goes according to plan in Oregon, Bowker said, visitors to the relocated site will see no difference from the current site.

"All the front-end stuff will still be the same," he said. "The only thing we would be changing is the location of our servers. We would still have all the same offerings with Beulah Park and everything else."

Winticket.com was launched in September 2000. Bowker said Ohio TAB, which also handles telephone account wagering for Beulah Park, started the service because it had to do something to get back the loyal customers it was losing to more accessible interactive race wagering services.

"We had been doing telephone wagering since 1994," he said. "We had seen a lot of our customers going to You Bet (Youbet.com) and other places on the Internet to make their wagers. We had to adapt to a changing marketplace."

Despite Ohio TAB's legal battles, Bowker says Winticket.com has been tremendously successful.

"Every month since we have launched it we have increased our members," he said. "We have gotten nothing but great responses from those who have ventured to the site."

Bowker wouldn't comment on how many customers have signed up for the service, but he did say it was in the neighborhood of 1,000 and that many of them were the targeted customers.

"We have seen a lot of our original (telephone wagering) customers come back to us now that we have launched the site," he said.

The Internet has also given Ohio TAB a new avenue to reach new customers. Bowker said the site takes wagers from outside Ohio, but that out-of-state residents still make up a small amount of the clientele.

"We still get probably 90 percent of our business from Ohio residents," he said. "We take wagers from residents who live in states where it is legal, but they make up a small amount of our clients."

Bowker said carving a niche in a relatively new market was key for Winticket.com to get back some of its original customers.

"There are not a lot of people doing what we are doing," he said. "Pari-mutuel wagering on the Web isn’t a real big arena just yet, but I do see it expanding."

It is that expansion that forces Bowker to stay on his toes.

"Every time we look around, there is someone new coming into the industry," he said. "We will be adding some features in the next 60 to 90 days that will enhance the site."

Bowker said Winticket.com has plans to add account history for the bettors, including information on how well they have done on particular wagers and races.

"We want to increase the amount of information our customers have," Bowker said.

In addition to expanding the offerings on the site, Bowker said he is always staying in tune with other options.

"We certainly think there could be a big avenue with PDAs," he said. "Every day I am looking at new technology and seeing if it will work with what we are doing."