The ambiguity about whether federal law trumps state law is front and center in a festering dispute between the New Hampshire Lottery and Churchill Downs over the legality of its Twin Spires app, which offers pari-mutual horseracing wagers to state residents.
New Hampshire Lottery executive director Charlie McIntyre has gone so far as to say the app could stymie Churchill Downs’ hopes of obtaining a license to launch historic horseracing machines in his state.
Operated by TwinSpires, a subsidiary of the Louisville, Kentucky-based Churchill Downs, the app “is not necessarily compliant with the law, at least as we read it,” McIntyre told VIXIO GamblingCompliance in a phone interview on Thursday (April 14).
A spokesperson for Churchill Downs, who requested anonymity, disagrees.
“TwinSpires operates legally in New Hampshire and other states under the federal Interstate Horseracing Act,” the Churchill Downs spokesperson told VIXIO in a phone interview on Friday (April 15).
Ever since Congress passed the Interstate Horseracing Act in 1978, the gaming industry has insisted bets transmitted across state lines on horseraces are exempt from sports betting restrictions in the U.S. Wire Act of 1961.
Although the U.S. Department of Justice (DOJ) has never refuted the gaming industry’s position, it also has not endorsed it.
Several advance deposit wagering platforms, including TwinSpires, operate in New Hampshire under the Interstate Horseracing Act, according to sources.
“We look forward to continuing a constructive dialogue with the New Hampshire Lottery Commission,” the Churchill Downs spokesperson said.
But McIntyre said there has not been a dialogue between the New Hampshire Lottery Commission and Churchill Downs for several months.
When both sides were talking, “(Churchill Downs) said, ‘Yeah, yeah, yeah, OK, we understand that’ but it never got solved, and so, as you can imagine, it’s not my job to solve their problem as the state regulator,” McIntyre said.
McIntyre acknowledges the regulation of apps is a grey area, but he said Churchill Downs “should come into compliance with the laws (in New Hampshire) as we expect them to do so as gaming operators.”
New Hampshire is losing “hundreds of thousands (of dollars), if not millions” as gamblers in the Granite State use the unlicensed TwinSpires app to bet on horse races across the country, McIntyre said.
Even New Hampshire Attorney General John Formella is getting involved in the dispute.
“The New Hampshire Department of Justice takes questions of potential illegal activities related to gambling in the state very seriously,” Formella said in a prepared statement.
“We have been made aware of concerns related to Churchill Downs’ TwinSpires app and are currently reviewing them,” Formella said.
Churchill Downs abandoned operations in Texas after facing a similar challenge from the Texas Racing Commission.
Last month, Churchill Downs announced its purchase of Chasers Poker Room in Salem, New Hampshire.
Boston, Massachusetts is only about a 30-minute drive from Chasers Poker Room and Churchill Downs plans to install historic horseracing machines in the facility.
“The fact that they’re seeking a license for historic horseracing up here certainly weighs on their suitability for doing business in the state,” McIntyre said.