by John Scheinman

Youbet.com and America Tab stopped accepting online wagers from customers living in the District of Columbia last week on the advice of the Oregon Racing Commission, which regulates a multi-jurisdictional hub for advanced deposit wagering companies.

A recent review of state wagering laws by the commission found the criminal code of the District considers it unlawful to “place a bet or wager, accept a bet or wager, gamble or make books or pools on the result of any athletic contest.”

The code lists “trotting or running race of horses” among its regulated events.

Racing fans in the District of Columbia reported Youbet.com shut them off in the middle of the September 26 race card from Belmont Park.

“I was startled,” said Richard Prosten, a Youbet.com customer in Northwest Washington, who saw a message flash across his computer screen saying he could no longer bet. “I gaped at it.”

Randy Evers, the new executive director of the Oregon Racing Commission, said following the review, "We contacted the attorney’s for the ADWs that were taking bets in Washington, D.C., and agreed they should not take bets from there.”

A spokesman for Youbet.com said company president Charles Champion was in Europe and not available for comment. The spokesman for the publicly traded company wrote in an email that, “The District… is a comparatively small market for Youbet in terms of handle and revenue, [and] was the only jurisdiction affected by [the commission] review.”

The Youbet.com spokesman declined to reveal the number of accounts held by District residents, or the amount of money they wagered. Evers said the Oregon Racing Commission did not know the numbers, either.

“We don’t ever know or ask for a breakdown by state where bets are coming from,” he said.

Approximately $268.2-million was wagered through companies operating in the Oregon hub in the first quarter this year, according to results released by the Oregon Racing Commission.

Laws governing online interstate wagering on horse racing are murky at best. The Interstate Wire Act expressly prevents the use of a ‘wire communication” for the purpose of interstate wagering. Conversely, Congress amended the Interstate Horseracing Act of 1978 seven years ago to permit wagering on racing despite opposition from the Justice Department. State laws, however, appear to supersede the federal laws.

Oregon became the default hub for bets placed online through ADWs when it passed laws favorable to the hosting of multi-jurisdictional wagering nearly ten years ago. Oregon law permits the bets as long as they originate in a jurisdiction where they are legal.

Clarification in the law has to be made, said Scott Daruty, chief executive officer at TrackNet Media Group, a joint-venture between Magna Entertainment and Churchill Downs Inc., which buys and sells content to unaffiliated wagering companies.

“It’s absolutely critical,” Daruty said. The biggest growth potential in our industry is account wagering, so we need to get it ironed out to realize our potential. To get it ironed out would require a single legislative and regulatory framework that covers the entire country.  … I think that’s unlikely ever to happen. I think we’ll end up with a patchwork of state legislation that hopefully fits together OK.”

Mike Soper, a restaurant chef living in Washington, D.C., held accounts with Youbet and BetPad, an online wagering service operated by Beulah Park through the Oregon hub. He said he was frustrated by his inability to get information about why his accounts were shut down.

“At least they sent an e-mail,” Soper said of BetPad. “Youbet was useless, and they were the best.”

He said a phone call to Youbet was routed to the Netherlands, Antilles, the company’s offshore base.

“I got a young lady with an island twang to her voice, and she’s got no idea what I’m talking about,” Soper said. “I never got an explanation. They just say changes in D.C. law.

“They need to do something they won’t be able to do—centralize something that is very broken up,” said Soper, who estimates he wagered approximately $2,500 per month on racing online. “This is a state-segregated industry that doesn’t have a central office. I use the NASCAR comparison. They need to have someone in charge and have it made uniform for the whole country. You just can’t have this fragmented leadership and make it work. It’s too bad.”

John Scheinman is a Maryland-based Thoroughbred Times correspondent