Panel moves to certify offshore outlets

The Association of Racing Commissioners International has begun an effort to develop a certification process for offshore betting shops that currently are not licensed by U.S. states, the association said on Monday.

The certification process has been endorsed by 13 state racing commissions, the RCI said, including California, Illinois, Kentucky, New Jersey, and New York. Under the process - which the RCI wants to implement by Jan. 1, 2010 - an offshore shop would be subject to a background investigation by the RCI before the shop would be allowed to send wagers into parimutuel pools.

Offshore betting shops rose to prominence in the racing industry in the late 1990s. The operations typically award rebates to high-rolling customers. Unlike most domestic wagering outlets, the operations are not licensed by U.S. states to do business, but nearly all racetracks accept wagers from the companies.

Rebate shops and their clients have been a concern to some in the racing industry after recent investigations linked customers of several of the operations to money laundering and illegal betting rings.

In addition, large bets originating at rebate shops have caused dramatic late-odds changes at many racetracks, raising suspicions of bettors. No evidence has emerged that the shops have facilitated past-post betting, however.