Justice Department opinion unlikely to impact horse racing
A newly released Justice Department opinion regarding the enforceability of the mob-era Wire Act has raised questions about the legality of some forms of interstate gambling, but will have no impact on horseracing’s current practices, according to Thoroughbred industry lobbying officials.
The opinion, released on Monday night but dated Nov. 2, when former Alabama Senator Jeff Sessions was head of the Department of Justice, reversed an opinion from 2011 in which Justice officials said that the Wire Act, a 1961 statute passed to crack down on illegal bookmaking, applied only to sports betting. The new opinion states that the act applies to all forms of gambling occurring across state lines. Sessions was forced out as attorney general five days after the opinion was signed, though his departure was unrelated to the Justice Department’s work on gambling regulations.
Racetracks accept wagers from bettors in states where parimutuel wagering is legal, but those wagers are regulated by the 1978 Interstate Horseracing Act, a set of federal rules separate from the Wire Act. The IHA allows racetracks to conduct full-card simulcasting and take interstate bets as long as the tracks have obtained consent from horsemen and racing commissions, providing the legal framework for practices that generate nearly 90 percent of the U.S. racing industry’s parimutuel revenues.
Alex Waldrop, the president and chief executive officer of the National Thoroughbred Racing Association, which coordinates the racing industry’s federal lobbying efforts, said that the new opinion from Justice does not appear to have any impact on racing’s current or future operations, including account-wagering, considering that the IHA is a separate regulatory silo for interstate gambling on horseracing. In addition, racing also has exemptions for its on-line gambling activities in the Unlawful Interstate Gambling Enforcement Act, passed in 2006.
“We maintain that there will be no impact on horse racing,” Waldrop said. “Still, we’ll keep monitoring what is going on.”
The new opinion aligns with an interpretation sought by Sheldon Adelson, who owns casinos across the U.S. and who contributed more than $100 million to various candidates in the 2016 election cycle. Adelson has sought for more than a decade to ban any type of on-line gambling, and lobbyists employed by the casino owner have argued that the 2006 gambling act explicitly outlaws internet gambling.
The opinion, if it is enforced or withstands expected legal challenges, could have an impact on interstate compacts that some states have reached in which they agree to offer on-line access to casino-type games or lotteries to their citizens. In addition, some states and gambling companies have been exploring the use of the compacts for sports wagering, under the reasoning that interstate agreements could give sports-book operators wider access to out-of-state markets in order to lay off bets and mitigate their own risk.