Goodlatte Opts to Pass Pari-mutuel Ordeal to the Courts

12 July 2000
It was bound to happen. Congressmen Bob Goodlatte and Bill Tauzin have reached an agreement that could have Goodlatte's Internet Gambling Prohibition Act (HR 3125) coming up for a vote as early as next week.

The biggest obstacle in front of the bill of late has been protest brought by family and religious groups over the pari-mutuel betting exemption, which they perceive as an expansion of gambling. Congress's solution: Let the courts deal with it.

With new language regarding pari-mutuel wagering being added to the bill, however, Goodlatte and Tauzin are satisfied that the bill does not expand gambling on the Internet. The modification clarifies that the bill prohibits all online gambling and only otherwise lawful State-regulated live pari-mutuel wagering activities that are conducted on a closed loop, subscriber-based system, not on the open Internet, are permitted.

"What we're doing is we're going to be neutral on the question," Tauzin explained.

In a nutshell, if the bill passes with this language, it will be up to the racing industry to prove on a state-by-state basis that closed-loop pari-mutuel wagering was already legal under pre-3125 laws. If the industry is successful in proving this, legal online pari-mutuel wagering would be grandfathered in and thus would not be an expansion of gambling. Ironically, one of the few things legislators have agreed upon in debates last month is that some sort of bill is necessary because pre-3125 laws don't properly cover new technologies such as the Internet.

At least one conservative group, the Free Congress Foundation, is still dissatisfied with the language. "Some of these members come from very conservative and religious districts and so they want to be able to say they are doing something about Internet Gambling," explained foundation VP Lisa Dean, "but they took the easy way out and turned to the courts to solve many of the problems."

Still, the previously choppy waters surrounding 3125 are eerily calm, and the two sides of the pari-mutuel standoff may at last be seeing eye to eye. The American Horse Council today threw its support behind the agreement in a memo to its members and has drafted a letter urging constituents to vote for the bill.

The Family Research Council is happy too. "New language in the Internet Gambling Prohibition Act has put more teeth into an already tough bill," said Janet Parshall, the council's chief spokeswoman. "Congress must act now to stop the imminent explosion of Internet gambling sites."

Tauzin called the compromise "a huge step toward preventing run-away gambling on the Internet."

Goodlatte emphasized, "I have been continuously committed to putting an end to gambling on the Internet. For too long, our children have been placed in harm's way as online gambling has been permitted to flourish into a billion dollar business, with more than 700 sites in existence. The Internet Gambling Prohibition Act makes it clear that online gambling must be stopped before it grows any further out of control."

As of today, no foreign governments have indicated that they will cooperate with the United States in enforcing such a law if it's passed.

Mark Balestra

Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.