Industry Hoping to Avoid ADW Disruptions

A 2006 federal law has ramifications for the advance deposit wagering industry.

The pari-mutuel industry is taking steps to avoid disruptions to advance deposit wagering stemming from the Unlawful Internet Gambling Enforcement Act of 2006.

The act outlaws the use of credit for online gambling, though pari-mutuel horse racing remains an exception should companies elect to offer credit to customers. After a six-month delay, the provisions took effect June 1.

Peggy Hendershot, senior vice president of legislative affairs for the National Thoroughbred Racing Association, said June 5 credit-card companies such as Visa and MasterCard have created systems that enable them to work under the UIGEA. There is a “safe harbor” provision, however, that allows the companies to decide whether they want to allow credit to be used through ADW providers.

“(The act) says if companies elect not to do business with the industry, they can do that,” Hendershot said. “Congress basically said, ‘We don’t want you intentionally harm the horse racing industry, but at the same time we don’t compel you (to offer credit).”

The NTRA is working with ADW providers to monitor whether customers are having their credit declined.

“If so, we’re getting information from customers so we can take the appropriate steps,” Hendershot said. “We’ll go from there.”

Action could involve contacting Congress or credit-card companies, she said.

Hollywood Casino at Penn National Race Course, which offers the Telebet and telephone and online wagering services, stopped processing credit cards for wagering until the situation is resolved.

In a release, the track said credit-card deposits for ADW through Visa or MasterCard can’t be processed. “We are working diligently in order to correct this issue, which is affecting all account wagering companies nationwide,” the track said.

Other ADW providers haven't taken such action at this time.