BIG LOBBY MONEY SPENT TO PROTECT HORSE RACING CARVE-OUTS

(617) (6-October-2006)

Over $3 million in contributions to politicians and their education and entertainment

One of the more interesting news stories flowing from the US attempt to disrupt financial channels to the online gambling industry was carried by the British newspaper The Independent this week.

According to the newspaper, the American horse racing industry doled out the big bucks to ensure that it was exempt from the online gambling financial restrictions that Congress seeks to impose.

Through lobbyists, the American horse racing industry made contributions to politicians and for education to the tune of $3 million, says The Independent....and it was much to the chagrin of online gaming companies in the UK.

The President of the US-based Poker Players Alliance , which does not have an exemption but would like one expressed his outrage at the apparent hypocrisy.

Michael Bolcerek said, "The horse racing industry is not afraid or ashamed of saying that they were able, for want of a better word, to buy their exemption from the new laws."

The American horse racing industry paid over $3 million in political donations, and spent millions of dollars more on entertainment and "education" for politicians, to ensure its exemption from the new internet betting laws that if signed off by the US President will make the movement of US gambling cash more difficult.

The figures show a sophisticated lobbying effort targeted at specific Congressmen, and has infuriated executives from the UK-listed online gambling companies whose shares have collapsed by more than half in the past three days as a consequence of the unexpected Congressional action.

The Internet gambling industry is vowing to learn lessons from the debacle, and promising to fund a new wave of lobbying to promote its own carve-outs or the full regulation of internet betting in the US.

The Independent says that offshore gambling firms, such as PartyGaming and others listed in London, have employed Capitol Hill lobbyists for several years, but have been unable to stem the tide of prohibitionist sentiment or to counter the more expensive efforts of other interest groups.

Figures compiled by the Centre for Responsive Politics show how the National Thoroughbred Racing Association and the owners of racehorses and racetracks have funnelled money into mainly Republican campaign coffers as the prohibitionist tide has risen.

Over the past six years, the industry made contributions of $3.02 million, all but $500 000 of which went to Republican candidates.

Bob Goodlatte , the member of the House of Representatives whose prohibition bill in February gave the campaign to ban internet gambling transactions its successful momentum, is one of the four members of the House of Representatives to have received the most campaign contributions, and the NTRA believes time spent educating Mr Goodlatte was the reason he agreed to exempt horse racing from his bill. He received $16 000 in campaign contributions, according to the figures. There is no suggestion Mr Goodlatte acted improperly in accepting campaign funds.

At a University of Arizona symposium on racing and gaming last year, Greg Avioli , the NTRA's head of legislation, said a ban on internet betting on horse racing was "an over-our-dead-body issue" and would jeopardise too many livelihoods (see previous InfoPowa report).

He said: "We're fairly confident we have the political strength in Washington to stop that, because this $40 billion agribusiness now lives and breathes on that [internet gambling] revenue. So we've got friends in Washington and I don't think they can pass a law over our objection."

Campaign contributions have long acted as a foot in the door in Washington's crowded lobbying scene, whose worst excesses were exposed once again last year with the jailing of Jack Abramoff , one of the most powerful lobbyists, who used $82 million of money from Native American casino operators to fund lavish dinners, trips and gifts for top Republicans.

The National Football League , too - worried about corruption of sporting events because of gambling on their outcome - made a ban on internet gambling its top lobbying project this year.