June 30, 2010 (CAP News Wire) – In New York, the horse racing industry is facing difficult times, and to top it off, the UIGEA appears to be cutting into its business — even though it’s not meant to.

And so, U.S. House of Representatives member Scott Murphy, representing New York, plans to introduce bipartisan legislation that would officially exempt online horserace wagering from the UIGEA.

“Murphy said he wants to make sure companies are assured they can accept such bets because online gambling is expected to become a growing source of revenue for the industry and those who work within it,” reports the state’s Post-Star, based on reports that MasterCard is balking at honoring online horse race bets in New York because of the UIGEA, which forbids financial institutions from allowing online gambling.

“[The UIGEA] states specifically betting on horse racing is allowed, in accordance with the Interstate Horseracing Act of 1978,” explains the Albany Times-Union. “But, Murphy said, the U.S. Department of Justice said the 1978 law contradicts, but does not nullify, the Wire Act of 1961, which prohibits Internet gaming.”

This confusion threatens the $200 million-plus placed in bets in New York (a 2009 statistic, per the Post-Star article), of which the New York Racing Association took about $19 million in income.

And it’s possible that Murphy’s effort to clarify the UIGEA on a federal level could open the door for more legal online betting in other states, not just New York. But for the time being, New York appears to be at an impasse regarding legal online gambling, like so many other states.

This news comes as New York reports a huge, apparently mob-related Internet gambling bust, per the Associated Press.

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