AGA, Horse Racing Abandon Goodlatte

18 June 2002

Numerous special interest groups within the gambling and entertainment industries are poised to fight the new version of the Goodlatte bill.

The House of Representatives Judiciary Committee on Tuesday marked up HR 3215, the Combating Illegal Gambling Reform and Modernization Act, which was introduced by Rep. Bob Goodlatte, R Va., in November.

The bill has seen many changes and amendments, but Tuesday's 18-12 vote to move the bill before the full House could be the most significant event in the bill's life. The bill was also amended to wipe out carve outs that would have allowed for online betting on horse racing and other special interests. The congressman behind that amendment is Rep. Chris Cannon, R-Utah.

The new version of the bill will bring many of its previous supporters to the opposing side of the fence now that their groups will be left out and not allowed to use the Internet as a distribution channel for their products.

"I am hoping that it doesn't have much of a chance. But it is now incumbent on everybody in racing to make damn sure it doesn't."
-Stan Bergstein

The biggest land-based gambling lobbying group, the American Gaming Association, and several racing industry groups told IGN that they will actively oppose the updated Goodlatte bill.

The National Governors Association is also opposed to the new bill because it doesn't allow individual states to decide if they want to regulate Internet gambling or not.

Frank Fahrenkopf, president of the AGA, said the addition of the Cannon amendment changes the main reason why his group went from originally opposing the bill to supporting it.

"We opposed the bill at first," he said. "I indicated to Congressman Goodlatte that we would support him if some fundamental changes were made."

Once those changes were made, which included adding language dealing with common pool wagering in Nevada and recognizing states' rights to regulate online gaming, the AGA came out in support of the bill.

The Cannon amendment doesn't affect common pool wagering, Fahrenkopf said, but it did strike from the bill the states' rights language.

"While we did get our common pool wagering added in, we will oppose this legislation on the fundamental basis of states' rights not being recognized," he said.

In addition to leaving out states' rights, the horse racing industry carve out was eliminated by the Cannon amendment.

Stan Bergstein, executive vice president of the Harness Tracks of America, was disappointed with the news that the Cannon amendment passed.

"Unless it gets reversed, and it is going to be about impossible to do that now that it is out of committee, racing is in an extremely vulnerable position," he said. "This is bad news, seriously bad news."

After previously getting a carve out from the committee to allow for horse racing bets to be placed via the Internet, Bergstein said the HTA will pump all of its legislative resources into fighting the bill.

"I am hoping that it doesn't have much of a chance," he said. "But it is now incumbent on everybody in racing to make damn sure it doesn't."

Fahrenkopf also said the AGA would be opposing the bill and making sure that members of the House are aware of the issues that have been omitted. He predicted that the AGA and the HTA wouldn't be the only groups opposed to the bill.

"They can speak for themselves, but I think what you are going to have happen is the lottery industry, the horse racing industry, native Americans and dog racing will all oppose this legislation," he said. "What that means in the long run, we will have to wait and see."

Bergstein said he is already in contact with other horse racing special interest groups and predicts that the industry will ban together to fight the bill.

"We will see how strong racing can be in fighting this thing and how many allies it can get," he said. "We don't have too many friends in Congress, and even some of them won't stand up and be counted. I don't see how any organization in racing can support it."

Mark Blandford, executive vice chairman of U.K. online wagering company, was pleased at the news that the Goodlatte bill had been amended. His company in May launched an aggressive advertising campaign aimed at Washington, D.C., media outlets encouraging politicians to regulate online gaming instead of prohibiting it.

Blandford said he felt that if the campaign played any role in getting the Cannon amendment passed, it was a very small one, but he was happy to see the change to the Goodlatte bill before it made its way out of the committee.

"I think this is a vote for common sense," he said. "The bill is unlikely to make further progress so perhaps now the debate can be widened to include discussion about a workable, regulatory model."

The Interactive Gaming Council, the leading trade association for the industry, has long opposed the Goodlatte bill. The group's leaders are hopeful, as is Blandford, that a new avenue of debate can be explored now.

Keith Furlong, deputy director of the IGC, hopes politicians will start to think about regulating the industry.

"There were a lot of people that wanted to prohibit Internet gambling except for their own interests," he said. "Now that every one is back to playing by the same rules, I think there is enough opposition to kill the bill and get industry leaders and lobbyists to start pushing for regulation."

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