A watchdog group of state legislators is taking a critical look at the rebating of horse race bets, a practice that Nevada regulators banned several years ago.
The group — the National Council of Legislators from Gaming States — are currently in an "information gathering mode," said member Frank Lamb, the director of the National Pari-Mutuel Regulators Association.
"Right now, we’re just trying to determine what needs to be done to protect the industry," Lamb told GamingToday on Monday. "This has been an issue that the industry has been struggling with for some time."
Lamb said the issue moved to the "front burner" this year because of the disparity between pari-mutuel handle and size of purses in 2003.
"We found that handle was up and purses were down, so we had to ask the question, ”˜Where’s the money going?’" Lamb said.
Although he’s not prepared to answer the question at this time, Lamb cited a report from the Jockey Club that suggests rebate shops now account for 10 percent to 15 percent of the total pari-mutuel handle in the United States.
That handle is estimated to be close to $15 billion. Moreover, the Jockey Club report reveals that handle has increased by more than 20 percent since rebating has become prevalent.
Lamb said the NCLGS (often called "nickel-gees") will conduct further meetings on the subject and most likely formulate a public policy statement on the subject.
The NCLGS met June 4-6 in Santa Fe, New Mexico for its summer meetings. Another hot subject was online sports betting.
David Carruthers, who owns off-shore sports books in Costa Rica and the United Kingdom, implored regulators to legalize online betting so he could bring business into the United States.
"He virtually begged regulators to establish regulations, even taxation guidelines, so he could open shops in America," Ann Henstrand, associate executive director of NCLGS, told GamingToday on Monday. "Members were intrigued by his proposal and certainly wanted to learn more."