Gambling News - May 2005 Edition
"Plan Could Cripple Net Horse Betting"
Senator Kyl fights back. Introduces a new bill on Internet gambling.
In response to the World Trade Organization’s recent decision on the
case brought against the U.S. by the tiny nation of Antigua, Senator John Kyl
of Arizona has decided to fight back by introducing his own bill on Internet
gambling. Kyl’s bill is titled “The Unlawful Internet Gambling Enforcement
Act”, and is a direct response to the WTO’s ruling that U.S. Internet
gambling policy is in violation of the General Agreement on Trades in Services.
The WTO has taken sides with Antigua’s claim that the Interstate
Horseracing Act discriminates against foreign Internet gambling operators.
This Act also permits the use of the Internet to place wagers on horseracing
between states. This makes the Interstate Horseracing Act an exception
to the U.S. Government’s general position that Internet gambling
is illegal. Senator Kyl’s bill, which proposes the prohibition of
banks, credit card issuers, and other financial institutions from entering
into transactions of any kind that relate to online gambling, would target
all forms of Internet gambling and would not create an exception for Interstate
horseracing or any other form of Internet gambling.
This makes Kyl’s bill much more direct and cleaner because it
tries to make all forms of Internet gambling illegal. If exceptions were
provided for in the bill, not only would it still be in violation of the
WTO ruling, but other gambling providers such as Indian tribes and lotteries,
would also start claiming exceptions. The Internet Gambling Enforcement
Act would also authorize a wide array of federal and state law enforcement
agencies to go after anyone violating Internet gambling laws.
Kyl’s bill, according to a lawyer with the Las Vegas firm of Lewis
and Roca, Anthony Chabot, representing some Internet gambling clients,
would be the most effective way of getting the U.S. to comply with the
WTO ruling and live up to its trade agreements. “The new Kyl bill
is the most likely vehicle,” he said. “It can effectively
shut down any interstate betting that passes through a financial transaction
service provider. The horseracing industry has been increasingly reliant
on interstate wagers for its viability.”
According to the National Thoroughbred Racing Association (NTRA), total
wagering on U.S. races fell about half a percent last year to just over
$15 billion. Had the Internet betting option not been available, total
wagering would have been significantly less.
Executive vice president of NTRA, Greg Avioli, expects that Internet
wagers on horseracing will hit $3 billion this year. “Account wagering
is the fastest-growing part of the business by a significant margin”,
said Avioli. “We are paying close attention to the bill”,
he added. “And we are confident that Mr. Kyl and other members of
the Senate do not want to interfere with legal pari-mutuel betting and
no matter what legislation passes, racing will be adequately protected.”
There have been other bills on Internet gambling put forth by different
state senators and all have failed. This is no indication that Kyl’s
bill will also fail. Firstly, his bill is a much cleaner approach to the
problem because it doesn’t include exceptions for different gambling
venues, as did previous bills. Also, the Republican Party is very much
the dominant party in the government and they exercise tremendous control
and power. They, in turn, are influenced by the religious right-wing,
which favors anti-gambling legislation.
Nevertheless, the horseracing industry is not without its political clout
and it might start flexing its political muscle soon. Noting that the industry
has been “in denial” over the danger posed by Kyl’s bill,
the publisher of Interactive Gaming News, Sue Schneider, said, “They
are starting to wake up to some of this a little more”, and added
that they could put up a good fight if they choose
Back to May News Home
