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Language in Florida Bill Would Prohibit ADW Wagering

Industry making sure Florida legislators understand potential negative impact.

It's early in the process but because the wording in a current Florida Senate bill would potentially outlaw advance-deposit wagering, industry leaders have quickly weighed in to make sure legislators understand how devastating such an outcome would be for horse racing in the state.

Florida's Senate Bill 8, a sweeping piece of legislation that addresses the lottery, the state's compact with Native American casinos, daily fantasy sports games, and other gambling issues, includes language that could prohibit ADW in the Sunshine State. Federal legislation allows licensed companies to accept phone and Internet wagers on pari-mutuel racing but states can choose to allow or prohibit account wagering. 

Industry leaders believe the state, which currently allows ADW, actually is seeking only to tax ADW outlets in the state. Still, those industry leaders are taking nothing for granted because the bill's current language would make it a third-degree felony for accepting wagers on horse races other than wagers made within the enclosure of a pari-mutuel facility in the state and through a facility's on-track tote system.

Speaking for The Stronach Group, attorney Marc Dunbar last month told Florida's Senate Appropriations committee that the owner of Gulfstream Park and ADW outlet does not oppose taxing ADW wagers made in the state as that approach could bring more money for the state, tracks, purses, and breeders. He made it clear that no one in the industry favors prohibiting ADW.

"We want to capture that money, not outlaw it," Dunbar said. "When you outlaw it, we'll be losing millions of dollars from the purse pool because those ADW companies cannot take a wager without an ADW agreement with the tracks. That's the critical part."

Dunbar said he looks forward to working with the bill's sponsor, Sen. Bill Galvano, a Republican, to clear up the language before it reaches the Senate floor. A corresponding Florida House Bill does not include such language. Dunbar believes licensing and taxing of Florida's ADW handle could capture about $1.5 million for the industry and the state.

Florida Thoroughbred Breeders and Owners Association chief executive officer Lonny Powell said the language needs to be cleaned up and legislators need to understand the importance of ADW for tracks, purses, and breeders.

"If the ADW language as stated in the bill was left to stand, that would be a regressive and negative result for the industry," Powell said. "However, none of us in the Thoroughbred industry believe that language, in that form, is going to be approved. 

"We do believe the discussion on ADW can lead to better economics and regulation of ADW in Florida."  

Dunbar said The Stronach Group would favor Florida, like other states, requiring ADW companies to be licensed in the state. He acknowledged that under current Florida law, the state and industry receive nothing from an ADW wager made by a Florida resident on an out-of-state race.

"If there is a leakage in the system, it's the money wagered on a New York race by a Floridian. Under that scenario, no taxes are paid to the state of Florida, and no purses or breeders' awards are generated to the industry," Dunbar said. "That has been the gap that the Thoroughbred industry has always hoped that at some point could be addressed."

He said an ADW licensing process in Florida also would help ensure off-shore sites that do not contribute to the industry would be specifically outlawed.

"Anybody that is in the gray market that is wagering in Florida—and they do, outlets in Curacao, Costa Rica, South American operators that are completely cannibalizing the entire operation that don't do agreements," Dunbar said, "It will create a mechanism to identify them and have an enforcement to say, 'No, no, you're not a licensed ADW hub you need to halt or go to federal prison.' That would be great."

The language in the bill addressing ADWs is of concern, but it's not especially different from the current law that allows wagering on a horse race, "within the enclosure of a licensed pari-mutuel facility." Under that standard, Florida currently has viewed ADWs, which are licensed in Oregon, as legal. As the state moves forward, industry leaders want to make sure any new legislation continues to recognize the legality of licensed ADW wagers in the state.

"The model in a number of states is that (ADWs) are licensed and the state overlays an administrative fee and a taxation rate," Dunbar said. "On behalf of the Thoroughbred industry, we would be thrilled if you would consider that. We've regularly said that we would be willing to consider taxation of (ADW) but right now we are terribly fearful (this bill would outlaw ADW). This sort of hit us when we were reviewing (the bill) that we would lose that revenue stream."

In addressing daily fantasy sports, the current bill also would outlaw online handicapping contests as language in the daily fantasy sports part of the bill prohibits such games to be based on the outcome of pari-mutuel events. Also the pari-mutuel part of the bill requires wagers made on racing outcomes be made through licensed pari-mutuel outlets. The Stronach Group has pursued civil litigation against online handicapping contest site DerbyWars.