Internet ruling spurs legislative talks

U.S. racing officials are working with the World Trade Organization to address concerns about a recent WTO ruling that horseracing has been granted an unfair exemption to conduct Internet and telephone wagering, the top federal lobbyist for the National Thoroughbred Racing Association said on Tuesday.

The ruling last month by the WTO's appeals court held that the U.S. could ban foreign gambling sites from taking wagers from U.S. residents, but it also said that the U.S. needed to iron out inconsistencies in its laws, which allow horseracing sites to take telephone and Internet wagers in many states.

"Our goal is to help them come up with ways in which the U.S. could come into compliance with that ruling under the current state of the law that would not unnecessarily hurt racing," said the lobbyist, Greg Avioli, the NTRA's vice president of legislative and corporate planning. "But the process is a slow one, and we don't expect anything to happen in the immediate future."

Avioli said there are "perhaps 10 different ways" to address the problem, and argued, in part, that the WTO ruling did not take into account the fact that racing sites do accept bets from offshore sites.

The discussions are taking place against the backdrop of renewed interest in Washington D.C. for federal legislation clarifying the U.S. position on Internet gambling. Most notably, Sen. Jon Kyl, a Republican from Arizona, has begun circulating a draft of a bill that would prohibit any bank or financial provider from providing funds for U.S. customers of Internet gambling sites.

Some political observers are concerned that the World Trade Organization ruling may widen support for the bill and lead to other amendments that could damage racing's exemptions in existing law.

"Significant changes in the political landscape in Washington provide an unprecedented opportunity for Senator Kyl to obtain the necessary votes in both the House and Senate," wrote Anthony N. Cabot, an attorney specializing in gaming law, and Eugene Christiansen, the chairman of the gaming consulting firm Christiansen Capital Associates, in a paper analyzing the potential impact on racing of the Kyl bill.

Avioli said that the Kyl bill as written would not address the WTO ruling in any way, and said that legislators he has talked to have "expressed absolutely no interest in hurting horseracing."