As racetracks across the country continue to suffer financial losses as a result of the rising popularity of Internet gambling, the state of Washington has found a way to help the racetrack industry take advantage of Internet gambling instead of take a beating from it. By granting Youbet.com of Woodland Hills, California, a license to accept online bets on horse races around the country from people in Washington, the Washington State Horse Racing Commission took back control, or at least partial control, of the racetrack industry in the state. In return for the license, Youbet.com must pay the Washington horse racing industry a percentage of each wager placed over the Internet and it must pay the state of Washington $400,000 for wagers that state officials say that Youbet.com accepted illegally in the previous year. While actual figures for the amount of money that Youbet.com received in bets is estimated to be closer to twelve million dollars, the $400,000 payback sends a clear message that Washington state will not tolerate or reward illegal conduct. Gary Christenson, the Commission’s Chairmen, when asked about the message that is being sent by the Horse Racing Commission’s decision, said, “By giving (Youbet.com) a license, we are insuring that the state of Washington is getting the money that it’s due. If we didn’t give them a license, it wouldn’t guarantee that they’d stop. “ He added, “We didn’t turn a blind eye because we did include their need to pay us back”.

The Commission’s decision to grant Youbet.com the license was passed four to zero with one member absent during the vote. A lawyer for Youbet.com, Scott Salomon, commented that Youbet.com applied for the license even though the company believes that the state lacks the authority to regulate interstate Internet gambling and even though Youbet.com did not break any laws by accepting bets from residents of Washington state over the Internet. Salomon remarked, “Any activity that we have or haven’t been doing has been with the full knowledge of everyone in that room”.

Internet gambling has been going on in Washington State for years now and other Internet sites continue to accept wagers illegally. With the licensing of Youbet.com, Washington will have licensed a total of three Internet companies to take online bets for horse races. The three companies that have been licensed are the ones that have been profiting the most. The two other companies that were granted licenses are TVG of Hillsboro, Oregon, which has paid $542,000 on $5.7 million in bets from Washington and XpressBet, as subsidiary of Magna Entertainment Corporation of Aurora, Ontario, which has paid $178,000 on $2.4 million in bets.

Prior to the licensing of these companies, all forms of Internet gambling were prohibited in Washington. Rick Day, Executive Secretary of the Washington State Race Track Commission, commenting on other companies that continue to accept wagers, said “If there are other companies that continue to bet illegally, then we will move forward with an investigation against those companies.” Presently, there are sixteen other states now that also have laws that regulate or restrict Internet gambling.