House Passes Internet Gambling Ban That Includes Racing Exemption

On Tuesday, June 10, the Internet Gambling Funding Prohibition Act, which outlaws the use of credit cards, wire transfers and other methods to fund gambling accounts for Web sites considered by the federal government to be illegal, passed the U.S. House of Representatives by a vote of 319-104. The bill, which will now go to the U.S. Senate, included a provision that would exempt horse racing and other gambling activities sanctioned by states.

Banning credit card deposits could greatly deter the number of people betting via offshore gambling sites. Because of the exemption, credit card companies would still be able to deposit their customers' money into online wagering accounts such as America Tab, XPressBet, YouBet, and TVG Network.

Introduced as H.R. 2143 by Rep. Spencer Bachus of Alabama, the bill was approved after lengthy debate. Several attempts were made on the House floor to amend the bill and eliminate horse racing's exemption, but none were successful.

Representative James Sensenbrenner (R-Wisconsin) sponsored an amendment that would have removed the racing exemption. The House defeated the proposal, however, at the urging of Representative Harold Rogers (R-Kentucky), who asserted, “We might as well just call this bill the horse racing prohibition act because it will literally kill the entire industry. It [Sensebrenner’s amendment] is intended to make current legal activities illegal [and] would be catastrophic to the $34-billion horse racing and breeding industry-especially to the states who rely on it for tax revenue.”

The amendment was defeated by a vote of 237-186. Now the bill will go before the U.S. Senate. The Senate is considering its own versions of the House bill that passed.

"This is a good day for horse racing," said National Thoroughbred Racing Association deputy commissioner Greg Avioli, who was a key lobbyist on behalf of the racing industry. "We explained the value of horse racing to states and emphasized exactly what the bill would mean. Now the Senate is going to have a lot of the same questions that we will need to answer. But I think there is support for the bill."

However, Visa recently stopped allowing its credit cards from being used for any form of online gambling, including state-sanctioned pari-mutuel sites. Avioli said industry officials are currently working with Visa to help develop a system that would differentiate between legal and illegal online wagering.

Back to News