Legal Kentucky Derby Betting

Betting on sports might be illegal (for now) throughout most of the United States, but horse racing is an exception almost everywhere for decades now. That means bettors interested in legal Kentucky Derby betting options can take advantage of the opportunity afforded by off-track locations like pari-mutuel kiosks and betting stations, over the phone or by way of internet horse racing betting sites across the country and based overseas. However, just because there are plenty of ways to legally bet on the 144rd Annual running of the Kentucky Derby, that does not mean that every fan interested in wagering on the ponies in the world’s most famous horse race knows how to go about doing so.

That’s where this handy guide to legal Kentucky Derby betting comes in. Here at KentuckyDerbyPreview.com we aim to give our readers the information they need to place bets on their favorite jockeys and horses the smart – and legal – way, and, of course, to cash out as big of a winning slip as they can. We will break down such information as the federal laws impacting horseracing generally, take a closer look at the few states with laws that specifically forbid residents and guests from placing wagers on horse races and, naturally, the methods that make legal Kentucky Derby racing available no matter where you reside.

As the most popular horse racing event found anywhere in the world, and by far the longest continually running race, the Kentucky Derby attracts 50,000 fans or more on race day at the historic Churchill Downs race track in Louisville and millions of television viewers nationwide. Additionally – and perhaps more impressively - tens of millions of sports bettors from around the world place billions of dollars in wagers on the race each and every year. One of the crucial points to consider when looking to enjoy legal Kentucky Derby betting in the United States is how federal laws impact betting on the Kentucky Derby and on horse racing in general, and that’s the discussion we will dig into in greater depth here.

The Interstate Horse Racing Act of 1978

The first thing to consider about betting on the Kentucky Derby is that it is 100 percent legal to do so in the US thanks to the passage of the Interstate Horse Racing Act of 1978. Though many states around the nation have well developed and long standing horse racing and breeding industries worth protecting and growing, it only makes sense that those states would have equally long standing laws in place to do just that. Nevertheless, it took until 1978 before the US Congress passed a federal law that explicitly addresses the idea that placing wagers on horses is officially legal throughout the country, but only if the individual states want to allow it by enacting laws of their own to that effect.

The Interstate Horse Racing Act of 1978 presupposes that each of the 50 states can decide for itself what kinds of gambling can legally take place inside their borders, which is a power granted to the states as per the common historical understanding the 10th Amendment of the US Constitution. Thus, the Interstate Horse Racing Act of 1978 was intended not to make something legal that was illegal, but rather to prevent the foreseeable eventuality that one particular state with no desire to regulate or legalize horse racing betting would interfere with the rights of another state that had already legalized the practice.

One of the biggest developments to come out of the passage of the Interstate Horse Racing Act of 1978 was a federal protection for the developing legal off-track horse racing wagering industry springing up around the country. Off-track wagering became a popular option for bettors in states that did not or do not have horse racing venues of their own to get in on the action in time for big events like the Kentucky Derby, for instance. Under this system, bettors in another state – even on the other side of the country – could place a bet on the Kentucky Derby at a pari-mutuel racebook in real time and keep up with the outcome via the simulcast (short for simultaneous broadcast) of the race. By inscribing protections for off-track pari-mutuel in federal law, the Interstate Horse Racing Act of 1978 allowed the practice (and the taxable revenues generated by this form of legal wagering) to help grow the entire horse racing and breeding industry in the US for decades to come.

The 2000 Amendment To The Interstate Horseracing Act of 1978

As groundbreaking as the Interstate Horseracing Act was in ensuring the legality of betting on horse races at the federal level, by the time the turn of the 21st century rolled around, it was beginning to show its age in several key areas. First of all, the law only recognized the 50 states’ right to offer off-track wagering options in person at racebooks in a state other than the one in which the race being bet on was actually taking place. With the arrival of the year 2000, it was clear that the future of most forms of commerce was going to be forged on the internet, as high speed internet access was already a fact of daily life for millions of American households and businesses.

The 2000 Amendment to the Interstate Horseracing Act of 1978 was an attempt to make additional forms of off-track wagering legal via a specific federal law in the same way that its immediate predecessor made pari-mutuel betting pools between several states a protected activity. The federal level law was amended – under a great deal of protest from the US Department of Justice (DOJ), it is worth noting - with new language approved by Congress that updated the definition of pari-mutuel wagering to specifically include wagers made or transmitted over the telephone or by way of an internet connection. This was met with plenty of opposition from lawmakers and DOJ officials that were generally against the expansion of gambling into the online realm, as it was tacit admission on the part of Congressional level policymakers that the DOJ had not taken steps to enforce laws against the interstate transmission of wagers or wagering information as codified in the Federal Wire Act of 1961 so long as those bets were based on horse racing.

Nevertheless, the 2000 Amendment to the Interstate Horseracing Act of 1978 was passed and, directly, was signed into law by former President Bill Clinton. With the passage of the newly updated law, pari-mutuel betting stations, kiosks, traditional off-track sportsbooks or even individuals with a fast enough computer at home could place bets on the ponies from weekly races all the way up to Triple Crown events like the Kentucky Derby. The only provision was that the phone or internet wager on horse racing had to be legal both in the state of the bettor’s residence and the state into which the bet was being transmitted.

The Unlawful Internet Gambling Enforcement Act of 2006

The stated purpose of the Unlawful Internet Gambling Enforcement Act of 2006 (hereafter shortened to the UIGEA) was to fix a perceived problem with the aforementioned Federal Wire Act of 1961, that being that the earlier law did not “in plain language does not prohibit internet gambling on a game of chance.” That is quite understandable, as the internet was not really invented as such way back in the 1960s, but we digress. The UIGEA had a far reaching impact on the broader gambling industry than just tying up some loose ends left by the Federal Wire Act, among those effects was to practically destroy the entire online poker and internet casino industries overnight.

The UIGEA was effectual in this regard because, rather than targeting sports betting rackets as a means of slashing sources of ill-gotten revenue revenues from making their way into the clutches of organized crime groups like the Wire Act or even by prohibiting the legalization of gambling from a supposedly moral standpoint as did the Professional and Amateur Sports Protection Act of 1992 (PASPA). Instead, the UIGEA prohibits financial institutions based in America from processing credit and debit card transactions related to gambling over the internet, which overseas based sportsbooks and internet casinos only recently got around by offering their own in house credit processing services.

While PASPA was an equally far reaching law, horse racing betting was never prohibited to the extent that other forms of sports wagering was subjected to, even at the level of individual states. Nevertheless, the UIGEA has no impact whatsoever on horse racing betting, specifically addressing this topic in Section D of the law, which reads, in part:

It is the sense of Congress that this subchapter shall not change which activities related to horse racing may or may not be allowed under Federal law. This subparagraph is intended to address concerns that this subchapter could have the effect of changing the existing relationship between the Interstate Horseracing Act and other Federal statutes in effect on the date of the enactment of this subchapter. This subchapter is not intended to change that relationship.”

That means that individual concerned about the potentially being in violation of the law if they want to pick the winner at the upcoming Kentucky Derby have nothing to worry about from the UIGEA. Pari-mutuel betting, even over the internet, is completely protected by the Interstate Horseracing Act of 1978 and its 2000 Amendment. Legal Kentucky Derby betting is probably one of the easiest and safest forms of betting a person could ever hope to do for this reason, as the practice is quite literally encouraged due to the net positive effect that wagering on horse racing has on long standing and culturally significant industry like horse breeding.

States Where It Is Illegal To Bet On Horse Racing

Though we’ve already talked about the good news in terms of just how widely available legal Kentucky Derby options are for interested sports bettors, there are, nevertheless, some cloudy skies in this regard. There are fully 38 of 50 states in which placing wagers on the “Fastest Two Minutes In Sports” is completely 100 percent legal and protected by state law, and, as we have already discussed at length, federal law as well. However, the 12 remaining states do have laws on the books that for whatever reason specifically ban placing wagers on horse racing.

It is worth pointing out that not every state that bans placing wagers on horse racing simultaneously does not allow the sport to take place. A good example of this is Arizona, which, due to the large amount of wealthy retirees that call the state home, is one of the national hotbeds of online sports betting in general, but does not allow betting on horse races despite having three thriving race tracks in its borders. Below you will find a list of the 12 states (and Washington D.C.) where it is illegal to bet on horse racing, so from that you can safely deduce that if your state (or the one you are visiting) is not on the list you can feel free to enjoy legal Kentucky Derby betting this year.

One final note: in certain states where it is legal to bet on horse racing online - and bet legally on the Kentucky Derby in particular - it is only legal to do so at designated websites. For example, in Maryland, which is famous for its horse racing and breeding history, players are only allowed to sign up at TVG.com and TwinSpires.com, in New Jersey players are limited to 4NJBets.com and Virginia requires its online pari-mutuel betting to take place at TwinSpires.com, TVG.com and XpressBet.com.