Churchill Downs’ Twin Spires App allows New Hampshire residents to place wagers on horse races throughout the U.S.However, questions arise about whether the app is running illegally.
This is largely because it isn’t regulated or taxed by the state of New Hampshire at this time.
Officials say the state is losing out on a ton of annual tax revenue
New Hampshire taxes its exclusive online sportsbook, DraftKings, at a rate of 51% of the company’s revenue every year. Should the state allow another online gambling entity, like Churchill Downs, the tax rate would drop to 21%.
The Twin Spires App has been operating for some time. This makes many officials see their gains as an ongoing loss to the state’s coffers.
“It’s hundreds of thousands of dollars,” said Charlie McIntyre, Executive Director of NHLC. “And they’ve been doing it for a number of years, and so it’s a significant amount of money.”
How can an unregulated online gambling app be legal in New Hampshire?
The Twin Spires App is basically an online gambling app that is operating within the New Hampshire state lines. That’s why the New Hampshire Lottery Commission (NHLC) flagged the app as a concern, given it’s unlicensed and “does not conform to state law.”
However, Churchill Downs maintains that the app simply serves as an off–track betting (OTB) facility. They say it’s completely legal under federal law, particularly the Interstate Horse Racing Act (IHRA) of 1978.
The IHRA federally legalized OTBs as well as interstate betting on horse races when it was enacted. The purpose of the legislation was to protect racetracks’ revenue.
States have license to enact laws that ban OTBs or impose taxes on their revenues. However, New Hampshire currently has no such laws.
“It is a gray area of concern for us because all of the gambling in this state happens through us,” said McIntyre. “We license or regulate it. In this case, neither.”
Churchill Downs’ Twin Spires isn’t new to state bans
This isn’t the first time Twin Spires and Churchill Downs face questions about the legality of online betting offerings.
Back in 2012, the Texas Racing Commission (TRC) brought a lawsuit against the company for taking horse racing bets from Texas residents.
A federal judge ruled in favor of the TRC and Twin Spires ceased taking wagers in the state.
Banning Twin Spires app in New Hampshire may require new legislation
The State’s Attorney General’s Office said that they are aware of the situation with the Twin Spires App and that they take “potential illegal activities related to gambling in the state very seriously.”
It’s a possibility, however, that the Attorney General accepts the app as legal under the IHRA. If so, new legislation will need to be put forth in the state’s legislature for the app to be taxed like other online gambling entities.
The Attorney General’s Office will be examining the legality of the app’s accessibility in New Hampshire in the near future.
