Horse Race Betting on Phones OK With Wire Act, Online Casinos No?
The big news in the online casino industry this week was the plea of Partygaming co-founder Anurag Dikshit to violations of the US Wire Act. Dikshit agreed to pay a massive $300 million penalty, and has to wait as long as two years to find out if he will be sentenced to prison time.
Meanwhile, the New Jersey Sports and Exposition Authority, which supervises state horse racing tracks, is moving to allow mobile phone betting on horses. The authority said wagers will be accepted through Internet-enabled phones as early as next year.
The irony in this is that the Wire Act was passed in 1961 specifically to prevent bookies from taking bets over phones. At that time, bookmakers generally took plays in two major areas: sports and racing.
The Department of Justice is on record as saying horse race betting is illegal on the Internet, but it continues to turn a blind eye to blatant violations by such institutions as Churchill Downs, which runs the TwinSpires site taking online bets.
Such selective enforcement has caused consternation and complaints from foreign countries that host online gambling operations. The Remote Gaming Association is pursuing charges against the US before the European Union, and Antigua has already been awarded damages due to US protectionism from the World Trade Organization.
Meanwhile, even as law enforcement takes the most convoluted reading of the Wire Act possible to use the law as a tool against Internet casinos, New Jersey will allow tracks to commit exactly the act the law was intended to prevent. This policy of the executive branch of the federal government to enforce the law, not as it was written by legislators, but as it wishes it to be, will only cause mounting difficulties for US trade interests, and lead to courtroom defeats.
