Oregon and D.C.: The Odds Couple

[October 31st, 2007]

When we read a recent Washington Post story about D.C. residents being stopped by the Oregon Racing Commission from online horse-race betting, we were puzzled.

Here’s what we learned about how Oregon could shut down D.C. gamblers from using Youbet.com and America TAB. Both were accepting horse-racing bets from the District of Columbia, which bars parimutuel wagering. (In parimutuel gambling, wagers are pooled and bettors are repaid according to odds.)

Out-of-state online horse racing is illegal in most states. But in 1999, the Oregon Legislature made the state a national leader in multijurisdictional horse betting by making it legal for out-of-state gamblers to wager on races worldwide through Oregon-licensed advance deposit wagering companies, or ADWs.

An ADW lets gamblers set up online accounts to bet. A gambler with a laptop in Siberia can bet on horse races in South Africa, and the electronic transfer could take place in Oregon.

When the Racing Commission heard about the online gambling out of D.C., Oregon regulators contacted attorneys for the two ADWs in D.C. after realizing the nation’s capital banned parimutuel wagering. The Racing Commission has specified that ADWs in Oregon take wagers only from states that allow pari-mutuel bets. The attorneys agreed those D.C.-based bets weren’t legal.

The eight ADWs in Oregon handled nearly $800 million for the first two quarters of 2007. That dwarfs the $53 million last year from all off-track betting at state venues, combined with wagering at Portland Meadows. Oregon netted $3.2 million as its share from ADWs in the biennium ending June 30.