04/04/2006 11:00PM

Justice official says racing under scrutiny

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A top official in the Department of Justice said during a hearing in Washington on Wednesday that his unit is conducting a "civil investigation" of the horse racing industry's widespread practice of accepting bets over state lines.

Bruce Ohr, the chief of the U.S. Department of Justice's Organized Crime and Racketeering Section, told the Judiciary Subcommittee of the House of Representatives that existing laws prohibit interstate betting on horse races, according to a copy of his remarks that he supplied to the committee.

The hearing was held by the subcommittee to take testimony on a bill that would prohibit financial companies from allowing customers to deposit money with Internet gambling operations. The bill also contains exemptions for horse racing that would allow the industry to continue to conduct interstate wagering and allow for betting over the Internet by residents of states that allow the practice.

Officials for the Justice Department have argued over the past six years that interstate wagering on horse races is illegal, but the department has never acknowledged an investigation into the horse racing industry's practices. Ohr also said during his remarks that the Justice Department is concerned about the potential for fraud, money laundering, and the involvement of organized crime in Internet wagering, citing specifically a recent indictment of 17 individuals for operating an illegal gambling ring that bet $200 million on horse races over four years through five rebate shops.