Kentucky Derby Could Get Hurt

May 9, 2008

The Kentucky Derby depends on the online gambling that comes every year from the bettors on their races. However, this year they have some concerns over the way that the regulations of the Unlawful Internet Gambling Enforcement Act or UIGEA will impact them.

Since the new regulations have been passed that expect banks and financial institutions to block all online gambling transactions, many are concerned that those transactions that include betting on the Kentucky Derby will be blocked as well. As the banks do not want to get in trouble with the federal government, you can expect that there will be more than one online gambling transaction that should go through, that won’t.

As the government has not informed the banks of which merchants can be dealt with for online gambling transactions and which ones should be blocked they are unaware of how to proceed. They are not going to be processing any transaction that they think might be a violation of the law.

Many advocates for both the financial institutions and the online gambling industry are asking the government to rethink their latest set of regulations, or at least make them clearer. The problem is that if the banks process a payment that is an online gambling transaction, they are the ones that will be penalized for it so it is no wonder they are proceeding with caution.

The law states that although online gambling is not illegal, the processing of the payments for it is illegal. However, online gambling as it pertains to horse racing is illegal – it is online casinos, etc. that are banned. If the banks process the online gambling transactions and they are found to be illegal, they could be looking at millions of dollars in fines and fees.




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