Wine Ruling Could Impact Account Wagering

A United States Supreme Court ruling that overturned Michigan and New York laws that keep wine produced out of state from being shipped to in-state customers could have implications for account wagering, a National Thoroughbred Racing Association official said.

The country's high court, in a 5-4 vote May 16, said state authority over alcohol sales doesn't supersede constitutional requirements that keep states from discriminating against out-of-state concerns. Though the ruling stemmed from challenges to Michigan and New York laws, winemakers believe it could lead to the elimination of bans in 24 other states, according to published reports.

The issue of whether one or more out-of-state account wagering services should be permitted to operate in states where the practice is legal has come up in several states, including Virginia and Washington. Account wagering is permitted under the federal Interstate Horseracing Act but individual states still decide whether to allow it within their borders.

"I think it's highly relevant," NTRA executive vice president of legislative and corporate planning Greg Avioli said of the wine industry ruling. "It's clearly going to have an impact. I can't think of two other issues more directly left to the states over time (than alcohol and gambling)."

The crux of the Supreme Court ruling is that if a state allows wine production and sales, it can't prohibit out-of-state entities from participating. It could, however, regulate participation by out-of-state entities. Avioli said the ability of states to regulate alcohol sales generally is more powerful than their ability to regulate gambling.

"I think we're moving away from states attempting to prohibit out-of-state (account wagering) operators and instead are moving toward states imposing reasonable regulations on those operators," Avioli said.

Michigan and New York allow in-state wineries to ship the product directly to consumers, but they bar out-of-state winemakers from shipping to their residents.

"If a state chooses to allow direct shipments of wine, it must do so on evenhanded terms," Supreme Court Justice Anthony Kennedy wrote for the majority.