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SAFE Port Act - Good News, Part 2

October 21st, 2006

The second good thing to come out of the SAFE Port Act, if you think people should have the ability to freely participate in such licensed online gaming activities as they desire, is the carve out that businesses operating horse betting sites received.

For purposes of the SAFE Port Act, “unlawful Internet gambling” does NOT include any activity allowed under the Interstate Horseracing Act. While this is not free from debate, the U.S. based racing industry would say that means that horse betting on the internet is a permitted exception under the SAFE Port Act and financial transactions can freely go to horse betting sites. The Interstate Horseracing Act had previously been amended to clarify that inter-state wagering on horse racing was contemplated under the Act.

However, some have argued, including the U.S. Department of Justice, that the 1961 Wire Act makes the offering of such wagering a crime since horse racing is a “sporting event or contest” and thus covered by the Wire Act. But no prosecutions have ever been commenced.

The SAFE Port Act was written to explicitly leave standing the current debate on the Wire Act vs. the Interstate Horseracing Act. The SAFE Port Act goes on at length to emphasize that it is not intended to and does not change the current state of the law, so that it leaves to another day whether the Interstate Horseracing Act, civil in nature, can trump the Wire Act, criminal in nature, so as to permit horse betting to be legally offered and to now, under the SAFE Port Act, be able to accept financial transactions from U.S. based banks. Horse racing sites do so and will continue to do so and we expect the Department of Justice, notwithstanding their pronouncements to date, will continue to do nothing to stop it.

Entry Filed under: U.S. Legislation

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