Advance-deposit wagering

Advance-deposit wagering (ADW) is a form of gambling on the outcome of horse races in which bettors must fund their account before being allowed to place bets. ADW is often conducted online or by phone. In contrast to ADW, credit shops allow wagers without advance funding; accounts are settled at month-end. Racetrack owners, horse trainers and state governments sometimes receive a share of ADW revenues.

It typically involves betting on horse or greyhound racing. Wagering may take place through parimutuel pools.

Legality

United States

Illinois was the first state to offer ADW and has allowed its adult residents to participate in ADW since 1999 under the Illinois Horse Racing Act of 1975; Illinois receives a cut of ADW revenues. Shortly thereafter, Connecticut, Maryland, New York, Oklahoma, and Pennsylvania allowed the practice as well. By 2011, 28 states expressly allowed advance-deposit wagering, with 13 remaining in a bit of a "grey area" as the practice isn't explicitly prohibited by state law. ^[1]

Australia

In Australia, wagering via telephone or via the internet is primarily controlled via the Interactive Gambling Act 2001 (Cth) . As of 2024, almost all usage of credit on these services, including use of credit cards to fund an ADW account, is prohibited under section 15C of the Act. ^[2]

Initial amendments to the Act in 2017 prohibited provision of credit by the operator to those physically present in Australia, but permitted use of an independently-issued credit card to fund the account.

On 11 June 2024, new provisions included by the Interactive Gambling Amendment (Credit and Other Measures) Act 2023 (Cth) came into effect, prohibiting most online or telephone operators from accepting any credit card, card linked to a credit facility, or digital currency for any purpose. These amendment in effect make all online and the vast majority of telephone-based gambling providers in Australia ADWs by law, although unlike the United States the specific term is generally not used colloquially.

Limited exceptions apply to non-automated, telephone-only operators where annual turnover (or expected turnover) is less than A$30 million. ^[3] Gambling providers can also provide credit to each other, under conditions set by the relevant minister, ^[4] for purposes such as laying off of bets.

Physically provided bookmaking operations do not fall under the Interactive Gambling Act, and thus are regulated through state and territory legislation.

Impact

Chapter 58 of the New York State Laws of 2012 added a new Section 911 to the New York State Racing, Pari-Mutuel Wagering and Breeding Law (Racing Law). Section 911 requires the New York State Racing and Wagering Board (Board) to assess the impact of advanced deposit wagering (ADW) in New York State including, but not limited to:

• The impact of out-of-state account wagering providers (OSAWP) accepting wagers from New York State residents;
• The annual dollar amount wagered by New York State residents through OSAWPs;
• The number of OSAWP accounts held by New York State residents;
• Information concerning New York State residents who utilize OSAWPs including residency.

Section 911 of the Racing Law required that the study, along with any recommendations, be submitted to the Governor and the Legislature by September 15, 2012. ^[5]

The results of the survey revealed that New York residents bet $165,567,707 in 2010 and $142,246,859 YTD 9/30/11 through the responding OSAWPs. This includes wagering on the New York racing product and on out-of-state racetracks. Table 1 provides detail of the handle by New York racetracks and out-of-state racetracks. The Board estimates this handle will exceed $200,000,000 in 2012.

The survey also showed that OSAWPs listed 18,769 accounts in 2010 and 21,310 accounts in YTD 9/30 2011 as New York resident accounts. All 62 New York State counties are represented. Table 2 lists the number of accounts by the county in which the zip code originated. Table 2-A lists the number of accounts by statutorily defined Off-Track Betting Regions. NJ Account Wagering, Sol Mutuel, Global Wagering Solutions and Elite Turf Club reported having no New York accounts.

References

1. Tidwell, Marie-Cecile O.; Welte, John W.; Barnes, Grace M.; Dayanim, Behnam (1 February 2015). "Gambling Modes and State Gambling Laws: Changes from 1999 to 2011 and Beyond". Gaming Law Review and Economics. 19 (1): 13–26. doi:10.1089/glre.2014.1914. PMC   5012365 . PMID   27688682.
2. Interactive Gambling Act 2001 (Cth) s 15C
3. Interactive Gambling Act 2001 (Cth) s 15D
4. Interactive Gambling Act 2001 (Cth) s 15E
5. "Report of the Impact of Advance Deposit Wagering on Horse Racing and Pari-Mutuel Handle in New York State" (PDF). State of New York Racing and Wagering Board. September 14, 2012. Retrieved 31 August 2014.