A Bad Week for the Prohibition Camp

20 December 2000
Support for Internet gambling prohibition in the U.S. is waning as the year 2000 winds to a close. During the past few days two blows have been dealt to the anti-Net betting cause.

First was a clarification added to a Commerce, Justice and State Departments appropriations funding bill that said:

Section 3 (3) of the Interstate Horseracing Act of 1978 (15 U.S.C 3002 (3) is amended by inserting "and includes pari-mutuel wagers where lawful in each State involved, placed or transmitted by an individual in one State via telephone or other electronic media and accepted by an off-track betting system in the same or another State, as well as the combination of any pari-mutuel wagering pools". . .

Spearheading the effort to include the provision were two Kentucky congressmen, Rep. Harold "Hal" Rogers and Sen. Mitch McConnell, assisted by Sen. Jim Bunning, also haling from Kentucky. The three congressmen wanted the provision to protect their state's thoroughbred racing industry.

"The cloud over the thoroughbred industry has been lifted," Rogers said after the appropriations bill was passed last Friday. "This relief is a major victory for Kentucky and the entire industry. This industry is part of the fabric of our region's economy, providing 42,000 jobs in Kentucky and 400,000 jobs nationwide."

Spurred by their efforts was an opinion issued by the Justice Department that interstate wagering had been conducted improperly for many years. Racetrack operators feared that they could face prosecution for offering betting on races "simulcast" from outside their state if the Interstate Horseracing Act wasn't updated.

"They (the Justice Department) said, 'Although we've never prosecuted anyone for this in 25 years, we have concerns that current practice may violate the Wire Act,'" Greg Avioli of the National Thoroughbred Racing Association told MSNBC. "That left the industry in a state of limbo."

Avioli called the changes a "very, very favorable development for racing because it takes the 800-pound gorilla of the Justice Department off our back and gives us the opportunity to continue to grow the business of off-track wagering." Although these changes permit Internet wagering in states that allow account wagering, the wagers must be conducted over a "closed-loop, subscriber-based system" that keeps out underage gamblers, as well as punters located where such betting is not legal.

The National Thoroughbred Racing Association continues to favor Internet gambling prohibition because Internet wagering sites take bets away from the tracks without re-investing any funds in the horseracing industry.

The second blow was delivered by House Rules Committee Chairman David Dreier, a longtime foe of prohibition effort. Rep. Dreier has promised that upon the reconvening of Congress next year he will challenge any attempts to pass anti-Internet gambling legislation, particularly because too much liability has been placed on Internet service providers.

"I'm not exactly sure where the Bush administration is going to come down on this," Dreier told Newbytes today. "I'm opposed to that kind of regulation. It seems to me that there will be a rigorous debate."

President-elect George W. Bush remains a dark horse in the prohibition battle. As governor of Texas, Bush tended to not favor the gambling industry. Nonetheless, many land-based operators feel that Bush will be fair with their industry.