Updated on 09/18/2011 1:11AM

Congress passes Internet gambling bill

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Both houses of Congress early Saturday morning passed legislation that includes provisions that prohibit most forms of internet gambling except for an exemption for horseracing.

The language affecting internet gambling was attached to a larger measure providing funding for security at U.S. ports. According to Greg Avioli, the chief executive officer of the National Thoroughbred Racing Association, "intense negotiations" over the past 72 hours led to the gambling measure being attached to the ports bill.

"This is a major victory for horseracing," Avioli said. "This is the culmination of eight years of lobbying on this issue."

The language would prohibit banks and other financial institutions from approving any transactions with sites that allow gambling. The horse-racing exemption allows for racing to continue to offer account-wagering under the terms of the Interstate Horse Racing Act, a federal bill passed in 1978.

Racing lobbyists had contended that without an exemption, account wagering -- which is the fastest growing segment of the pari-mutuel business -- would be illegal. Under some readings of various anti-gambling legislation introduced over the past five years, the practice of full-card simulcasting could have also been threatened.

In the current presidential administration, officials of the Justice Department have lodged objections to racing's account-wagering practices. The legislation passed early Saturday specifically states that the bill was not intended to address the department's legal questions, meaning that racing may still have to present a legal case to justify its current practices.

"That's still fine with us, because if this passed without the exemption, then that would have unquestionably been the end of account wagering," Avioli said.