Wed | Jun 23, 2021

Last parados for horse racing?

Published:Tuesday | April 17, 2012 | 12:00 AM

By Gordon Robinson

Recent United States (US) legislative advances in online gaming introduced yet another clear, present danger to Jamaica's already gravely ill horse-racing industry.

America has been dragged, kicking and screaming, into the 21st century by the proliferation of offshore gaming websites against which, in the past, they've foolishly waged a war with similar results as their wars against drugs and terrorism. Finally, at least with regard to Internet gambling, they are looking within.

On December 23, 2011, a Justice Department opinion by its legal counsel conceded what had heretofore been legal and gambling heresy, albeit obvious to any independent legal mind, which is that federal laws used to criminalise intrastate and offshore Internet gaming operations were, in fact, limited in scope to interstate operations only. The immediate effect of this opinion is to legalise all intrastate Internet gambling operations.

The legal tsunami goes even further. In 2011, these statutes, like the Wire Act 1961 and the imperialist Unlawful Internet Gambling Enforcement Act 2006, were used, together with the USA's considerable international muscle, to shut down popular offshore poker sites such as PokerStars.com and AbsolutePoker.com, which were used by millions of Americans.

In Jamaica, we were also bullied into applying legal pressure to Internet gambling sites located in the MoBay Free Zone and elsewhere. Jamaica complied meekly. Others fought back.

Finally, under threat of legal action, the Justice Department figured out that US federal laws can't interfere with state legislatures who have legalised Internet gaming, nor can they prevent residents in states with legalised gambling from using offshore Internet sites to place their bets. These federal laws are severely limited in scope to instances where residents of states where gambling is illegal bet with out-of-state websites.

Furthermore, with specific regard to the obsolete 1961 Wire Act (which, obviously, can't affect Wi-Fi), the Justice Department has now realised it only prohibits interstate gambling on 'sporting events'. Websites carrying betting on lotteries or table games like poker are unaffected.

Us overreach

But the most important legal issue hasn't yet been taken up by the Justice Department, and that's the matter of the USA's penchant for passing legislation that claims extraterritorial jurisdiction. Professor I. Nelson Rose of the Whittier Law School (acknowledged as one of the foremost experts on gambling law) has been quoted by The Thoroughbred Times as opining that the Justice Department's conclusion "eliminates almost every federal anti-gambling law that could apply to gaming that is legal under state law".

How does this affect us? Now that the Justice Department admits that federal law can't overturn state law where that state law legalises gambling, it follows that nations with legal gambling like Jamaica would also be permitted to bet with US websites located in states where gambling is legal.

This is one more competitive option for US and Jamaican horse-racing promoters to worry about; one more avenue for Jamaican punters to learn of and benefit from properly structured gambling activities; one more alternative to driving, taxiing or bussing to the lone racetrack surrounded by crime-infested hot spots or to uncomfortable OTBs for the privilege of betting into a tote whose intent resembles highway robbery.

Recently, strict regulation by the New York Gaming Board has forced the New York Racing Association (NYRA) to reveal that it's been unintentionally overcharging exotic bets winners for 15 months. NYRA had been deducting a 26 per cent promoter's percentage from exotics (including pick 3s; pick 4s; trifectas; and superfectas) when the correct takeout was 25 per cent.

As a result, NYRA has been ordered to repay punters US$8.6 million of overcharges, including paying personally to those whose underpayments can be established through racing accounts. As a further salve to bruised customers' sensibilities, NYRA reduced its takeout on exotic bets to 24 per cent as at December 28, 2011.

In Jamaica, a clueless, careless, callous, clumsy, Caymanas Track Limited (CTL) deducts 40 per cent from all exotic bets (more, in some instances) before calculating dividends. The international takeout percentage for win, place and show betting from totes worldwide doesn't exceed 15 per cent. In Jamaica, CTL's win and place takeout is 30 per cent (no show betting).

The Church needn't worry about the Sunday racing debate. As Jamaica becomes more computer savvy; more educated about the skewed financial foundation that plagues our local industry; more aware of the contempt with which Jamaican punters are treated; more informed about overseas alternatives and their easy availability from the comfort of one's own home, then, all appeals to commercial common sense having been exhausted, local racing's self-imposed death sentence will mercifully be executed.

Peace and love.

Gordon Robinson is an attorney-at-law. Email feedback to columns@gleanerjm.com.