Wednesday, July 12, 2006
US anti online gambling close to adoption

On 11 July, the U.S. House of Representatives passed the Internet Gambling Prohibition and Enforcement Act. The proposed law prohibits all forms of interstate online gambling except betting on horse racing and introduces measures to enforce this ban, such as restrictions on credit card companies.

The exception for betting on horse racing was discussed intensively by the Representatives. At the end of the day, an amendment to strike all the so-called exclusions, including the racing provisions, was defeated 114 to 297.

The horse racing provisions in the approved law aim to maintain the status quo regarding what is currently legal with respect to interstate betting. Although interstate online gambling is already banned through the existing Wire Act, the Interstate Horseracing Act (IHA) allows interstate online betting on horse racing. The latter however, is disputed by the Department of Justice, who believes that the Wire Act has priority over the IHA.

The text of the proposed law is formulated in a way that it also finds the support of the Department of Justice, which has to implement any anti-egaming provisions. It provides inter alia that whatever interstate horse race betting is legal under the IHA, including that over the Internet, will not be affected by the prohibitions of the bill. The Department of Justice continues to maintain that the IHA does not allow interstate wagering.

The new law preserves states' rights to allow intra state online gambling, but it will have to ensure that outer state residents have no access to the services.

The Senate will now have to approve the new law before it enters into force.