The Interstate Horse Racing Act was a landmark piece of legislation passed in 1978 to facilitate cooperation between states in growing the sport. It is the only piece of federal legislation with authority over parimutuel wagering in horse racing in the United States.
Prior to the act being passed, it was incumbent upon each individual state to govern its racing activities. The first sign that this policy would be untenable came in 1971 when the New York City Off-Track Betting Corp. offered wagering on the Kentucky Derby despite not receiving the rights to the race from Churchill Downs. The act of defiance was a watershed moment that eventually necessitated government intervention in the form of the IHA.
The IHA’s intended goal is to prevent interference by one state in the gambling policies of another. It specifically prohibits the acceptance of an interstate off-track wager unless consent is obtained from the host racing association, the host racing commission, and the off-track racing commission. It also prohibits betting systems from employing a takeout for an interstate wager which is greater than the takeout for off-track wagers on races run within that state, except where greater takeout is authorized by state law.