Internet Gambling Bill Has Pari-Mutuel Exemption

Legislation introduced in the U.S. House of Representatives prohibits the use of credit for Internet gambling but contains provisions to protect interstate pari-mutuel wagering.

U.S. Rep. Jim Leach of Iowa introduced the Unlawful Internet Gambling Enforcement Act of 2005, which has been referred to the House Committee on Financial Services, according to an advisory from the American Horse Council. The measure, which has 18 co-sponsors, is similar to legislation introduced by Leach in the past.

The bill prohibits the use of credit for unlawful Internet gambling, which is defined as "to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet, where such bet or wager is unlawful under any applicable federal or state law in the state or tribal lands in which the bet or wager is initiated, received, or otherwise made."

The bill excludes from its definition "interstate horseracing," which is defined as "(the) placing, receiving, or otherwise transmitting (of) a bet or wager that is governed by and complies with the Interstate Horseracing Act of 1978." The IHA was amended in 2000 to include account wagering.

The bill includes exemptions for tribal gaming.

"To me, the language looks OK (for the pari-mutuel industry)," AHC president Jay Hickey said.

"It makes the exemption for horse racing," said Greg Avioli, executive vice president of the National Thoroughbred Racing Association who oversees legislative and corporate planning matters. "It's a different approach than the Kyl bill but it achieves the same results for us as far as we're concerned. They both in different ways exempt racing."

Avioli spoke in reference to legislation sponsored by Arizona Sen. Jon Kyl, who since the late 1990s has attempted to ban Internet gambling, or at least the financial mechanisms that facilitate it.

No action on Internet gambling is expected this year. Congress will be in session for a few weeks in December, then won't reconvene until early January.