2005 - Harness Tracks of America, Inc.

HARNESS TRACKS OF AMERICAExecutive NewsletterA daily fax and e-mail report on racing and gaming developments in North America and beyondStanley F. Bergstein, Editor April 8, 2005TWO RIGHTS AND A BIG WRONGThe United States and Antigua are both claimingvictory after a World Trade Organizationappellate board handed down a 146-page decisionthis week. Both countries may be right intheir reading, but from this vantage point thereis no good news, under any interpretation, forU.S. racing.The reason is that in order to comply with thedecision, the U.S. has several courses it couldpursue. One would be to ignore the decision andface sanctions, since it has little trade withAntigua. A more draconian approach would beto leave the World Trade Organization. A thirdpossibility -- and as long as it exists it is bad newsfor racing, with no other interpretation -- is thepossibility that the Interstate Horseracing Act of1978, the bedrock on which current Internetwagering rests, where legal, could be challengedor amended. That possibility was hinted at byActing U.S. Trade Representative Peter Allgeier,who said, “This report essentially says that if weclarify U.S. gambling restrictions in certain ways,we’ll be fine.” But he added that federal restrictionson Internet gambling could be maintainedand still meet the WTO’s decision, which denieda U.S. appeal of an earlier decision that the U.S.policy contravenes WTO rules and regulations.Antigua’s case with the WTO contended U.S.policy interfered with its economic welfare bypreventing U.S. citizens from betting with legal,licensed and regulated Antigua Internet bettingoutlets, and the WTO agreed. Antigua arguedthat the Interstate Horseracing Act is inconsistentwith U.S. prohibition on Internet gambling,and its legal counsel, a Texas attorney, says thedecision was “clear cut, and Antigua won on allmajor points.” A law professor at the state universityof New York in Buffalo said, “Ifadvising a client, I would urge caution.”It is good advice for racing.The professor, Joseph Kelly, who is editor of GamingLaw Review, warned that the matter is notgoing to be clear cut. “There are going to be furtherproceedings on both sides,” he said, notingthat while the U.S. might ignore Antigua, withwhich it has few trade dealings, it would find itdifficult to ignore other trade partners intent onexpanding Internet betting. “How are you goingto stop a British-licensed casino in the UnitedKingdom from taking wagers from American citizens?”Kelly asked, and answered the questionhimself. “You just can’t.”YOU WON’T BELIEVE THIS, BUTAfter months of diligent lobbying in New Yorkto get VLT revenues to racing increased, the NewYork Thoroughbred Breeders and the New YorkThoroughbred Horsemen’s Association now areurging Gov. George Pataki to veto the legislationraising racing’s share. The thoroughbred horsemenare piqued at the New York Racing Association,saying NYRA won’t split the new revenueaccording to terms of current law, which providefor 7.5% to 10% to purses. Pataki doesn’t likethe legislation either, passed over his objections,and he has until Tuesday to veto the measure.The horsemen are unhappy because the measure,as passed, does not mandate how the revenue willbe shared. The horsemen’s execs, Dennis Bridaand Richard Bomze, oppose the legislation eventhough it could mean more money for everyonein racing. If their plan is to bluff the legislature,which has already decided against Pataki’s plan,they are playing a very dangerous game, particularlywith Pennsylvania gearing up with slots fornext year.TWO GAMBLING BILLS DEADSlots for tracks in New Hampshire and tablegames for those in West Virginia died yesterday,although there could be a last minute resurrectionin West Virginia today. The sessionends tomorrow night.