Odds On Racing - Harness Racing

Internet Gambling Law Threatens Horse Racing
By Rich Muni, www.cincinnati.com

June 25, 2008

When the federal Unlawful Internet Gambling Enforcement Act passed in 2006, the horse racing industry was protected with an exemption. However, it is now clear that this exemption will fail to protect the industry from the harmful effects of the act.

The act requires blocking of "unlawful" Internet gambling by financial institutions. However, neither the act nor its regulations (as currently drafted) define unlawful Internet gambling. As a result, banks and credit card companies have been deputized to not only enforce this deeply flawed law, but also to define its scope. Unfortunately, the law penalizes banks severely if they err on the side of processing transactions later determined to be unlawful, while permitting them to block perfectly legal transactions. As a result, banks can be expected to err strongly on the side of caution.

Many banks and credit card companies will simply block all online gaming transactions to ensure compliance with the 2006 act. And the horse racing exemption requires that financial transactions fully comply with every detail of the Interstate Horse Racing Act to be exempt - a determination financial institutions are probably neither equipped nor inclined to make. And, the biggest concern for blocking of these transactions is the Justice Department's position that all interstate horse race wagering violates the Wire Act (particularly as the Justice Department has shown no reluctance in arresting suspected Wire Act violators).

Please write to your congressman and ask him or her to support House Resolution 5767, which would place a moratorium on enacting the badly flawed UIGEA regulations. Please also ask him or her to support House Resolutions 2610, the Skill Game Protection Act, and 2046, the Internet Gambling Regulation and Enforcement Act. Both would clarify lawful vs. unlawful gambling, and both bills would amend the Wire Act to clarify its scope.

Rich Muny, an engineer who lives in Union, Ky., is an advocate of Internet poker playing. He is on the board of directors of the Poker Players Alliance.