Wire Clarification Act Protects Internet Horse Wagering

With the Unlawful Internet Gambling Enforcement Act (UIGEA) officially going into effect on June 1st, there has been some confusion as to the legality of online pari-mutuel wagering on horse racing.

UIGEA prohibits banks and other financial institutions from accepting wire and credit card transactions that are associated with gambling, however the purpose of this legislation was to hinder illegal off-shore gambling operations.

Under the law, Internet pari-mutuel betting is legal, however some banks have been reluctant to except payments because of the gray area UIGEA has created.

This week, Congressmen Scott Murphy of New York and Brett Guthrie of Kentucky have introduced The Wire Clarification Act in the House. Murphy’s plan with this new bill is to help clarify these types of legal transactions and cut down the amount of lost business the horse racing industry has suffered because of UGIEA.

“Horse racing is at the heart of our local economy. It brings much-needed revenue and is responsible for thousands of local jobs,” said Murphy. “When the Treasury Department and the Fed created new rules governing internet gambling transactions, credit card companies felt that it was no longer safe to accept online transactions.”

In New York, online betting on races at Belmont, Aqueduct and Saratoga totaled more than $200 million per year in revenue. The haziness of the current law could put heavy strain on the local economy.