International Racing Group, a rebate shop located in Curacao but owned and operated by United States-based Youbet.com, was licensed by the Oregon Racing Commission Nov. 2, and is the first such entity to be licensed by U.S. regulators.
The racing commission approved an application by IRG, a Youbet.com subsidiary, to operate a multi-jurisdictional wagering hub. IRG, known in industry circles as Holiday Beach, "sought to allay concerns on the part of some racing industry participants about the lack of domestic oversight of offshore pari-mutuel wagering companies," according to a Youbet.com release.
The licensing process required IRG to submit a formal operation plan for racing commission review, including information on ownership, management, financial resources, account verification, and wagering security. In addition, commission staff inspected the IRG call center in Curacao.
Officials said IRG would continue offering rebates to its high-volume customers because Oregon law permits the practice. Youbet.com acquired IRG in June of this year.
IRG was named but not charged in an 88-count federal indictment in New York that alleged illegal gambling earlier this year. The company handled $140 million in 2003 and $210 million in 2004, according to figures provided by Youbet.com at the time it purchased the company.
The IRG license is separate from the Oregon license held by Youbet.com for Internet and telephone betting, though Youbet.com in its release said its ownership of IRG played a role in the racing commission's decision. Youbet.com is a publicly traded company subject to Securities Exchange Commission reporting requirements.
Youbet.com chief executive officer Charles Champion said the IRG licensing has the potential to benefit the entire industry. He said the domestic licensing should help expand the operation's base of racetrack partners because it will be operating under U.S. regulation.
"For Youbet, the license serves to affirm our commitment to pari-mutuel industry best practices in operational integrity and wagering compliance," Champion said in the release. "In particular, Youbet's independent wagering compliance committee, established earlier this year and made up of outside experts in law enforcement, security, regulation, gaming and financial transactions, was another key consideration in the licensing process.
"I believe that ORC's action is an important step forward for U.S. racing. Now there is a regulated offshore entity in the market that meets the compliance needs of tracks and the demands of customers."
Some racetracks have denied such secondary pari-mutuel operations--SPMOs--access to their pools because of concerns over regulatory oversight. Others have let them back into their pools after they provided requested information.
Along with Youbet.com, there are five other multi-jurisdictional wagering hubs in Oregon. They are operated by AmericaTAB, TV Games Network, The Racing Channel, US Offtrack, and XpressBet. Oregon offers a big incentive for hubs--a tax rate of only 0.25% on merged pools.
IRG has simulcast agreements with more than 90 Thoroughbred, Standardbred, and Greyhound tracks in the U.S. Youbet.com said IRG only accepts live telephone wagers from its customers.