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Alexander M. Waldrop President & CEO NTRA 2010 IFHA Meeting

Alexander M. Waldrop President & CEO NTRA 2010 IFHA Meeting. Introduction. September 2006 -- Congress passes Unlawful Internet Gambling Enforcement Act (UIGEA) European gaming company stocks crash Pari-mutuel wagering exempted

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Alexander M. Waldrop President & CEO NTRA 2010 IFHA Meeting

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  1. Alexander M. WaldropPresident & CEONTRA2010 IFHA Meeting

  2. Introduction • September 2006 -- Congress passes Unlawful Internet Gambling Enforcement Act (UIGEA) • European gaming company stocks crash • Pari-mutuel wagering exempted • September 2010 --- Congress considers legislation to legalize Internet gambling

  3. Background • U.S. gambling law and policy generally determined at the state level • Gambling is strictly prohibited except at specific, highly regulated locations • Americans tolerate legal gambling when heavily taxed

  4. Legal Framework • Interstate Wire Act of 1961 (Wire Act) criminalizes interstate gambling when conducted via Internet or other electronic media • Interstate Horseracing Act of 1978, (IHA) exempts interstate wagering on horseracing from Wire Act prohibitions

  5. Interstate Horseracing Act • Mandates consents from • Racetrack where race is run • Horsemen racing at racetrack • State regulators in state where race is run • State regulators in state where wager originates • Protects intellectual property rights of participants • Strengthens participant’s demands for fair compensation • Exclusive to horseracing

  6. Threats to Horseracing • $1.3 billion ADW online wagering only growth sector in U.S. racing • Frank Bill introduces “tax and regulate” approach to online gaming • Frank Bill licenses domestic and foreign entities • Frank bill does not protect horseracing • ADWs licensed at the federal level • Subjects racing to double taxation and regulation

  7. Opportunities for Horseracing • Exempt U.S. horseracing from tax-and-regulate scheme • Address longstanding tax issues for horseplayers • Compensate to mitigate impact of new competition

  8. Prospects for Legalization • Upcoming midterm elections may undermine long term prospects for passage of Internet gambling legislation • Internet Gaming may be addressed in post-election lame-duck session • Need for revenue makes passage of Frank Bill possible

  9. Other Developments • Several states considering the legalization of limited forms of Internet gaming • Exchange wagering introduced in New Jersey and California • Revenue splits left to negotiation between the parties • Absent agreements, no exchange betting

  10. Conclusion • Internet gambling and exchange wagering are both possible in U.S. in coming months and years • Expanded online betting opportunities have significant potential for multiple impacts on U.S. pari-mutuel wagering industry • NTRA actively involved to ensure that racing receives a fair and proportionate share of new revenues

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