Authorities in Michigan have told three race betting firms to immediately discontinue accepting wagers via telephone and over the Internet from Michigan bettors. The warnings were sent by the attorney general's office as well as the office of the racing commissioner. On the receiving end were Youbet.com, Ladbroke at the Meadows and Ladbroke's parent company, Magna Entertainment Corporation (operators of Call-A-Bet).
"In order to avoid further actions," the letter stated, "you are requested to immediately cease accepting wagers from persons within Michigan and to cease accepting wagers on horse races operated pursuant to licenses issued by the Michigan Racing Commissioner."
Attorney General Jennifer Granholm explained, "The companies have now been warned to stop these illegal activities. The law in Michigan is clear: Off-track betting is illegal, whether it occurs online or on the phone. Failure to abide by the law will result in charges against these firms."
Individuals and companies found in violation of Michigan law, which prohibits any type of off-track betting, could face up to one year in prison and a fine of up to $10,000. The only legal wagering in Michigan or on Michigan racing is that which occurs at the racetrack.
"Internet and telephone wagering is an illegal component of the horse racing industry in Michigan and is responsible for a significant amount of lost revenue," said Michigan's racing commissioner, Annette Bacola. "It is unregulated, untaxed, and it is taking dollars from our horsemen and tracks. Our collaboration with the attorney general's office will ensure that Internet companies conform to our state's legal requirements for wagering."
She added, "The economic impact on Michigan's seven pari-mutuel racetracks during 2000 is unknown because there is no mechanism in place to track the illegal wagering that is occurring."
According to Bacola's office, last year the tracks jointly presented 2,308 days of live and simulcast pari-mutuel racing. More than 1.5 million fans wagered $399.3 million at the tracks, a 4 percent decrease from total handle earned in 1999.
Michigan state law, in this case, is supported on the federal level by the Interstate Horseracing Act. Under Section 3004 of this code, regulation of interstate off-track wagering is subject to the "consent of host racing association, host racing commission, and off-track racing commission as prerequisite to acceptance of wager."
Click here to read the federal Interstate Horseracing Act.