Earlier this month, Canada based Woodbine Entertainment refused to take wagering from an off-shore rebate operation based in the Caribbean island of Curacao.

Curacao-based International Racing Group already offers wagering on U.S. races, channelling the bets through a hub in Oregon, into the official U.S. pools. It gives rebates (higher winning pay out rates) to large volume bettors.

Although the practice of off-shore rebate operations is legal, they are not cheered on by many racetrack pools. Woodbine argues that the percentage of their handle that is redistributed to racing operations is much lower than the one of non-rebate operations. Pari-mutuel racing business relies on substantial contributions from wagering revenue to fund breeding programs, purses, and overall infrastructure, and rebators do not contribute sufficiently, according to Woodbine.

Rebators argue that the higher pay outs to large volume bettors ensure that these bettors do not drift away to other forms of gambling. The rebates, they argue, increase therefore the total betting volume, and therefore the total contribution to racing.

Woodbine ensures that the impact of its ban on rebators on its total handle has been small.