House panel keeps racing's exemption

The House of Representatives Judiciary Committee approved a bill on Thursday that would prohibit most forms of Internet gambling but provides exceptions for horse racing.

The bill passed by a vote of 25-11 after 90 minutes of debate, much of it centering on the horse racing exemption. Several amendments designed to strip the exemption out of the bill failed to win approval from members of the committee.

Horse racing lobbyists have argued that, without the exemption, the industry would be unable to conduct interstate simulcasting, which provides approximately 90 percent of the wagering revenues to the industry, or account wagering, which is the fastest-growing segment of the business.

Before the committee hearing on Thursday, the U.S. Justice Department dropped a long-standing objection to the exemption after reaching an agreement with lobbyists for the National Thoroughbred Racing Association, according to the NTRA's deputy commissioner, Greg Avioli. The agreement stipulates that the Justice Department would no longer oppose the exemption at the legislative level but would seek injunctions in court if it believed racing was violating the law.

"We're very comfortable with that, because there's no legal basis for their argument that the Wire Act doesn't allow interstate betting," Avioli said.

The bill is now headed to the House floor. A companion bill has yet to be introduced in the Senate.

Versions of the same bill have failed to pass in each of the last four years. This year, however, many lobbyists believe that the legislation has a strong chance of passage in both houses.