CTBA Legislative Update
May 5, 2006

H. R. 4777

Title: To amend title 18, United States Code, to expand and modernize the prohibition against interstate gambling, and for other purposes.

Sponsor: Rep. Bob Godlatte (VA) (introduced 2/26/06 Cosponsor 131

Latest Major Action 5/3/06 House committee/subcommittee action Status: Forwarded by Subcommittee to Full Committee.

The following are the California members:

Rep. Dennis Cardoza

Rep. Wally Herger

Rep. Duncan Hunter

Rep. Daniel Lungren

Rep. Elton Gallegly

Rep. Jerry Lewis

Rep. Howard McKeon

Rep. William Thomas

PROTECT DOMESTIC HORSERACING

Support H.R. 4777, The Internet Gambling Protection Act


--H.R. 4777 was introduced by Rep. Bob Goodlatte and has over 130 cosponsors. This bill is designed to help curtail illegal Internet gambling. Internet gaming is largely illegal currently in the U.S., but offshore sites in places like Antigua, Costa Rica, and even Great Britain are attracting thousands of U.S. bettors.



--This legislation, however, also recognizes that states have traditionally been the regulator or gaming in their own states. Additionally, the legislation also recognizes that horseracing is unique and is the only form of gaming that operates under a federal statute—the Interstate Horseracing Act (IHA)—in addition to state regulation.



--The IHA allows account wagering and Internet wagering on horseracing where permissible by states. Currently, 19 states have made executive decisions or passed state legislation to allow such wagering. The IHA was first passed by Congress in 1978 and later amended in 2000 to allow this type of activity as allowable under state law.



--Rep. Goodlatte’s bill recognizes states’ rights and the IHA and does not outlaw this activity. Instead, the bill’s focus is primarily on illegal offshore wagering. If these important provisions were removed from the bill, the entire domestic horse industry would be greatly threatened with economic ruin.



--According to a recent study performed by Deloitte Consulting LLP, the horse industry contributes some $39 billion annually to the U.S. economy and provides nearly 1.5 million full-time jobs. Additionally, nearly 2 million people own horses and another 2 million are involved with horses through volunteer work or other affiliations.



--The Department of Justice has long contended that there is a conflict between the IHA and the 1961 Wire Act regarding Internet gaming. It is the horse industry’s strong belief that the IHA explicitly allows legal wagering on horseracing where permissible by states and that was the very basis of the IHA, which was debated and passed by Congress many years after the Wire Act. To date, the Department has filed no suit against any horseracing endeavor as allowed on the IHA.



--Regardless of whether Justice’s interpretation is correct or the industry’s is, this legislation does not endorse either view. This legislation recognizes that if the IHA is viable, the current horseracing wagering as allowed by states would continue. Alternatively, if DoJ’s interpretation were correct, then current horserace wagering allowed by states under the IHA would be illegal.



--We strongly encourage you to support H.R. 4777 and to vote against any amendments that would harm states’ historical rights to regulate the horseracing industry as allowed under the Interstate Horseracing Act.