June 30, 2010
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News: Murphy/Guthrie Introduce Pari-Mutuel Gambling Law
Credit card companies have been pulling away offering payment services for gambling site due to a lack of clarity in the law. Addressing their concerns is Congressmen Scott Murphy (D-NY) and Brett Guthrie (R-KY) introduced new legislation this week that would clarify the rules in regard to online pari-mutuel wagering on horse racing. Their bill, the Wire Clarification Act (H.R. 5599) was drafted in response to recent rules issued by the Department of Treasury and Federal Reserve under the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 which makes payment by credit card potentially illegal. Because of the uncertainty of the new rules, credit card companies are not willing to take the risks of being assessed large fines resulting from the confusion. Their response has been simply to stop processing any gambling transaction online.
According to Representative Murphy, horseracing is a lucrative business that has been "at the heart of our local economy" for years. In addition to generating much needed revenue, these activities also provide thousands of jobs. Murphy said the Wire Clarification Act will give credit card companies the confidence needed to know that accepting internet gambling transactions are safe. Pari-mutuel online wagering between Aqueduct Park, Belmont Park, and Saratoga alone totaled roughly $210 million last year. This contributed over $18.5 million to the New York Racing Association (NYRA). Domestic horseracing provides over 1.4 million jobs and generates nearly $39 billion in revenue. It’s important to note that credit card processing represents virtually all of the online revenue that is generated.
Murphy also noted that not only would the tracks suffer from the loss of this revenue, but online gambling also supports the breeders, workers, and other personnel relating to horseracing not to mention the loss of revenue to the credit card companies. Murphy said the Wire Clarification Act provides clarification of rules that would relieve lenders of a threat of prosecution.