UNLAWFUL INTERNET GAMBLING LEGISLATION

Background

Opponents of Internet gambling have been introducing legislation in the last several Congresses to prohibit this form of gambling. The latest efforts in the last Congress involved legislation to prohibit the use of credit and other financial instruments to fund it. Passage of this legislation would not only prohibit unlawful Internet wagering, but might also resolve a problem important to the racing industry. Many in racing are concerned that our biggest patrons are wagering off-shore with unregulated Internet sites that can offer rebates. Passage of the Internet legislation would go a long way to solving this problem for the industry.

To date, the racing and breeding industry has been successful in carving out exclusions for itself from the various bills, each of which defines the Internet so broadly that they would have prohibited the use of any interactive computer, such as racing’s totalisator machines, the telephone and any similar device using the Internet even minimally.

In effect, these bills would have prohibited activities that racing has been offering for some time, such as simulcast wagering and advance deposit wagering, under state and federal law. In addition, “credit” was broadly defined and would have included almost all financial transactions, except the exchange of cash.

Legislation

Legislation has not yet been introduced in this Congress dealing with the Internet gambling situation. But we expect the introduction of legislation to prohibit the use of credit in connection with Internet gambling. Such a passed the House by voice vote in the last Congress.

We also expect Senator Jon Kyl (R-AZ) to introduce a bill since he has done so in the last three Congresses.

AHC Position

The AHC has supported the various bills introduced since each recognized the differences between legitimate, lawful and state-regulated gaming businesses, such as pari-mutuel horse racing, which uses technology to facilitate existing activities under state and federal law, as opposed to unregulated, offshore gaming operations that are operating beyond the reach of U.S. law.

The industry must continue to work with Congress to ensure that any bill ultimately considered maintains this distinction and does not prevent racing from continuing account wagering whether on the phone, the Internet or any electronic media.