Internet Gambling Comes Under Fire in Kentucky

The Governor of the Commonwealth of Kentucky, Steve Beshear, may rid the state of internet gambling if all goes as planned at a forfeiture hearing, which is scheduled for Thursday according to the Associated Press. Judge Thomas Wingate will preside over the hearing, which if successful may block access to internet gambling sites by Kentucky residents.

The Associated Press told Poker News Daily that, of the 141 domains that the Commonwealth is seeking to block access to, Doyle’s Room, Full Tilt Poker, and Bodog Life are included. Beshear stated in a press conference on Monday, “Unlike casinos that operate on land or on riverboats in the United States, these operations pay no tax revenues, provide no jobs and yield no tourism benefits. They are leeches on our communities.”

At the hearing on Thursday, Judge Wingate will decide whether to hand control of the 141 domains in question to the State, which is then expected to block access to them entirely. The methodology that would go into blocking them is not yet known. The Poker Players Alliance, the online poker industry’s main lobbying force, currently has a lead story on its website entitled, “PPA Alert in Kentucky: Governor Seeking to Block Internet Poker.”

Playing online poker is a felony in the state of Washington. Kentucky becomes the latest state to crack down on the multi-million dollar industry. The Commonwealth is home to the Kentucky Derby, which is one of the world’s richest horse races. It is run on the first Saturday of May and attracts high-profile celebrities from around the world. Churchill Downs is its signature track and home to the Derby. It’s located in Louisville, Kentucky, which is on the banks of the Ohio River. Kentucky also operates a lottery and is part of the multi-state Powerball.

In the fiscal year 2008, sales for the Kentucky Lottery amounted to $778 million, up 4.6% over the fiscal year 2007. The lottery, combined with horse racing, are two sources of revenue that Beshear appears to be protecting against internet gambling, according to the AP story: “Beshear said Kentuckians are likely spend ‘tens of millions of dollars’ on illegal Internet gambling sites each year — money that might otherwise go to Kentucky’s horse tracks, charitable events and the state lottery.”

Jim Quinn, Executive Director of the Off Shore Gaming Association, told Poker News Daily, “I don’t believe Governor Beshear will be able to stop anything. Dedicated gamblers will find a way.” The OSGA helps internet gamblers decide which sites to play on and resolves any conflicts that arise. It has been in business for the last 10 years and is headquartered in Philadelphia.

Whether online gambling on horse racing is legal at the national level is a matter that remains up in the air, according to Congressman Barney Frank (D-Mass). At a recent mark-up hearing of HR 6870, the Payments System Protection Act, Frank noted that the answer to whether online horse racing is permitted under the Unlawful Internet Gambling Enforcement Act and Wire Act of 1961 “depended on which department you asked.”

It’s an issue that Frank is hoping to clarify by passing HR 6870 during the 2008 Congressional session. The bill calls for a list to be developed of legal and illegal activities under the UIGEA. In addition, it implements regulations against online wagering on sports betting within 60 days of passage. The bill was passed out of the House Financial Services Committee one week ago, but its future has not been announced.