Steve Beshear Aims To Shut Down Internet Gambling, Courier Journal And I Approve. But Someone Asked Me Yesterday: "Why Not Shut Down Porn Sites, Too"?
Many of you may have read about Beshear seeks to block Internet gambling sites, or below:
FRANKFORT, Ky. -- Gov. Steve Beshear announced yesterday that he is trying to shut down illegal Internet gambling in Kentucky, though some industry experts say his chances of success aren't good.
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Beshear said at a news conference that illegal and unregulated gambling Web sites -- many of which operate from other countries -- are "leeches on our communities" and unfairly undermine Kentucky's horse-racing industry.
In what he called a potentially groundbreaking case, Beshear said he filed a civil suit last week in Franklin Circuit Court against 141 Internet domain names, such as pokerstars.com and fulltiltpoker.com.
The governor said Kentucky law allows the state to seize devices used in illegal gambling -- in this case, the domain names.
According to Beshear, the suit asks the court to force the sites to block access by Kentucky users or relinquish control of their domain names.
After the suit was filed, the administration received an order from Franklin Circuit Judge Thomas Wingate requiring the immediate transfer of the domain names to the state. After the state's suit was filed, Wingate sealed it for undisclosed reasons, said Beshear spokesman Jay Blanton.
Wingate scheduled a hearing for Thursday on whether the domain names must be forfeited to the state.
By seizing those Internet names, the Beshear administration said, the state can require the casino operators to block their sites from being accessed in Kentucky.
But David Stewart, a Washington, D.C., attorney who is an expert in gambling law, doubted that Beshear's strategy will work.
"This is -- forgive me for being blunt -- a stunt," Stewart said.
Other states, such as New York, have tried to prosecute operators of illegal gambling sites to little avail, he said.
Jim Quinn, chief operating officer of the Off Shore Gaming Association, said going after domain names would be a new approach to cracking down on Internet gambling.
Quinn said his association is a Philadelphia-based for-profit company that serves as a "watchdog" over the off-shore sports book, casino and poker industry to provide the public with information if they choose to wager online.
He said it might be possible to seize the domain names if it can be proven that Kentuckians are participating in illegal gambling. But he added that the gambling companies likely would simply set up new domain names.
"You are going to have to spend time, money and energy to go after these companies, and what would really be the end-benefit to anybody?" Quinn said.
Kentucky's approach is to try to compel companies that set up the domain names -- known as registrars -- to alert the owners that they have received a valid court order requiring the names to be transferred to the state, Blanton said.
If that were to happen, the state could prevent Kentucky Internet users from accessing the sites and, possibly, end the use of the names completely, he said.
Beshear said Kentucky's law is unique in allowing the state to seize illegal gambling devices. Beshear said Kentuckians 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.
Beshear campaigned last year on a pledge to push for expanded gambling, and during this year's regular legislative session he proposed a measure to allow up to 12 casinos in the state. The bill failed without coming to a vote in either the House or Senate.
Asked whether it is morally dubious to condemn one form of gambling while condoning others, Beshear said he is going after online gambling because it is not regulated by the state or federal government.
He said the sites could be preying on youths, not paying gamblers their winnings and even funneling money to terrorist organizations.
"This is a threat to national security," he said.
Asked whether he'd consider legalizing and regulating Internet gambling, Beshear initially said the state might take that approach in the future.
The administration later issued a clarification, saying that Beshear has no intention of pursuing Internet gambling as an option in Kentucky.
In 2006, Congress reined in some Internet gambling by going after banks and other financial institutions, prohibiting them from transferring money to and from illegal gambling operations.
But because most of the Internet gambling operations are based in foreign countries, it is difficult to eliminate them, Stewart said.
Below also is the Courier Journal's editorial on the Governor's move:
Internet gambling
Kentuky is an imperfect agent for any type of gambling crackdown. Horse racing is one of its signature industries, and its governor is eager to legalize casinos.
Advertisement
Nonetheless, Gov. Steve Beshear is right to try to shut down Internet gambling sites that, by his estimate, attract "tens of millions of dollars" each year from Kentuckians.
Not insignificantly, those are untaxed dollars, and losses are directed out of the country rather than toward Kentucky businesses, banks and legal gambling activities, including racetracks. Moreover, since most Internet gambling is off-shore and unregulated, players have few if any assurances that the games are honest and that they will be paid if they win.
Previous American efforts to curb Internet gambling generally have been disappointing. It has flourished despite widespread state prohibitions, and states that have tried rigorous enforcement have had few positive results.
A 2006 federal law designed to thwart Internet gambling by forbidding banks and other financial institutions from transferring funds to and from illegal gambling operations is often circumvented by establishment of money-handling intermediaries.
Finally, the role of off-shore gambling operations in a global economy is complex. Indeed, complaints about U.S. restrictions have been brought to the World Trade Organization.
For all that, however, the Beshear administration's initiative is intriguing. Kentucky's law banning Internet and other unauthorized betting is strict, and the state can demonstrate genuine harm to racing and regulated gambling.
More important, the state's strategy -- pursuing a civil lawsuit to try to force Internet gambling sites to block access by Kentucky players or else surrender control of their domain names -- seems novel.
One possible outcome is that Internet gambling operators might agree to regulation and taxes.
To have strong impact, even if successful in court, Kentucky's course likely would need to be adopted by other, larger states or by the federal government.
But that's possible. The case here is likely to be watched closely.
I got into a conversation with a friend of mine yesterday about this gambling issue. His name is Clay Hundley, and he is a former commonwealth's attorney for Monroe and other counties.
After I told him that the idea is to reap lost revenue to Kentucky from gamblers who evade its taxes, he posed the question to me about "why we can't go after porn sites" the same way.
Apart from First Amendment implications surrounding porn, I told him, I could not come up more reasons why Kentucky cannot do to porn what it is now doing to Internet gambling.
Anyone have any good answers for him?
FRANKFORT, Ky. -- Gov. Steve Beshear announced yesterday that he is trying to shut down illegal Internet gambling in Kentucky, though some industry experts say his chances of success aren't good.
Advertisement
Beshear said at a news conference that illegal and unregulated gambling Web sites -- many of which operate from other countries -- are "leeches on our communities" and unfairly undermine Kentucky's horse-racing industry.
In what he called a potentially groundbreaking case, Beshear said he filed a civil suit last week in Franklin Circuit Court against 141 Internet domain names, such as pokerstars.com and fulltiltpoker.com.
The governor said Kentucky law allows the state to seize devices used in illegal gambling -- in this case, the domain names.
According to Beshear, the suit asks the court to force the sites to block access by Kentucky users or relinquish control of their domain names.
After the suit was filed, the administration received an order from Franklin Circuit Judge Thomas Wingate requiring the immediate transfer of the domain names to the state. After the state's suit was filed, Wingate sealed it for undisclosed reasons, said Beshear spokesman Jay Blanton.
Wingate scheduled a hearing for Thursday on whether the domain names must be forfeited to the state.
By seizing those Internet names, the Beshear administration said, the state can require the casino operators to block their sites from being accessed in Kentucky.
But David Stewart, a Washington, D.C., attorney who is an expert in gambling law, doubted that Beshear's strategy will work.
"This is -- forgive me for being blunt -- a stunt," Stewart said.
Other states, such as New York, have tried to prosecute operators of illegal gambling sites to little avail, he said.
Jim Quinn, chief operating officer of the Off Shore Gaming Association, said going after domain names would be a new approach to cracking down on Internet gambling.
Quinn said his association is a Philadelphia-based for-profit company that serves as a "watchdog" over the off-shore sports book, casino and poker industry to provide the public with information if they choose to wager online.
He said it might be possible to seize the domain names if it can be proven that Kentuckians are participating in illegal gambling. But he added that the gambling companies likely would simply set up new domain names.
"You are going to have to spend time, money and energy to go after these companies, and what would really be the end-benefit to anybody?" Quinn said.
Kentucky's approach is to try to compel companies that set up the domain names -- known as registrars -- to alert the owners that they have received a valid court order requiring the names to be transferred to the state, Blanton said.
If that were to happen, the state could prevent Kentucky Internet users from accessing the sites and, possibly, end the use of the names completely, he said.
Beshear said Kentucky's law is unique in allowing the state to seize illegal gambling devices. Beshear said Kentuckians 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.
Beshear campaigned last year on a pledge to push for expanded gambling, and during this year's regular legislative session he proposed a measure to allow up to 12 casinos in the state. The bill failed without coming to a vote in either the House or Senate.
Asked whether it is morally dubious to condemn one form of gambling while condoning others, Beshear said he is going after online gambling because it is not regulated by the state or federal government.
He said the sites could be preying on youths, not paying gamblers their winnings and even funneling money to terrorist organizations.
"This is a threat to national security," he said.
Asked whether he'd consider legalizing and regulating Internet gambling, Beshear initially said the state might take that approach in the future.
The administration later issued a clarification, saying that Beshear has no intention of pursuing Internet gambling as an option in Kentucky.
In 2006, Congress reined in some Internet gambling by going after banks and other financial institutions, prohibiting them from transferring money to and from illegal gambling operations.
But because most of the Internet gambling operations are based in foreign countries, it is difficult to eliminate them, Stewart said.
Below also is the Courier Journal's editorial on the Governor's move:
Internet gambling
Kentuky is an imperfect agent for any type of gambling crackdown. Horse racing is one of its signature industries, and its governor is eager to legalize casinos.
Advertisement
Nonetheless, Gov. Steve Beshear is right to try to shut down Internet gambling sites that, by his estimate, attract "tens of millions of dollars" each year from Kentuckians.
Not insignificantly, those are untaxed dollars, and losses are directed out of the country rather than toward Kentucky businesses, banks and legal gambling activities, including racetracks. Moreover, since most Internet gambling is off-shore and unregulated, players have few if any assurances that the games are honest and that they will be paid if they win.
Previous American efforts to curb Internet gambling generally have been disappointing. It has flourished despite widespread state prohibitions, and states that have tried rigorous enforcement have had few positive results.
A 2006 federal law designed to thwart Internet gambling by forbidding banks and other financial institutions from transferring funds to and from illegal gambling operations is often circumvented by establishment of money-handling intermediaries.
Finally, the role of off-shore gambling operations in a global economy is complex. Indeed, complaints about U.S. restrictions have been brought to the World Trade Organization.
For all that, however, the Beshear administration's initiative is intriguing. Kentucky's law banning Internet and other unauthorized betting is strict, and the state can demonstrate genuine harm to racing and regulated gambling.
More important, the state's strategy -- pursuing a civil lawsuit to try to force Internet gambling sites to block access by Kentucky players or else surrender control of their domain names -- seems novel.
One possible outcome is that Internet gambling operators might agree to regulation and taxes.
To have strong impact, even if successful in court, Kentucky's course likely would need to be adopted by other, larger states or by the federal government.
But that's possible. The case here is likely to be watched closely.
I got into a conversation with a friend of mine yesterday about this gambling issue. His name is Clay Hundley, and he is a former commonwealth's attorney for Monroe and other counties.
After I told him that the idea is to reap lost revenue to Kentucky from gamblers who evade its taxes, he posed the question to me about "why we can't go after porn sites" the same way.
Apart from First Amendment implications surrounding porn, I told him, I could not come up more reasons why Kentucky cannot do to porn what it is now doing to Internet gambling.
Anyone have any good answers for him?
Labels: General information
posted by KYJurisDoctor at 7:29 AM
1 Comments:
Viewing porn is not considered an illegal activity under KRS. Fronting as a bookmaker (e.g. acting as the house as opposed to the bettor) is an illegal activity. Under KRS, civil remedies are available to anyone who sues a "bookmaker" (e.g. Full Tilt Poker) under Kentucky law after the expiration of a 6 month period of time. These are considered void transactions and a 3rd party (e.g. Kentucky) can collect not only what the gambler bet, but a treble amount of an award. The statute is 5 years. Kentuckians have spent approximately 2 Billion dollars over 5 years gambling on these sites. The math is simple: The Commonwealth is owed $6 Billion dollars. While they will never collect the vast majority of this money, the illegal gambling sites have a decision to make as to what is their brand worth to them to continue their operations outside of Kentucky in the future. They can settle with Kentucky or they can try to arrange a different domain name and hope that the public will find them. For sites like Poker Tilt.Com, they have invested multi-millions of dollars recruiting/soliciting gamblers to this domain location. If they change to Poker Tilt. Net tomorrow, who will know where to go. Further, since the company owes millions to the state, the prospect of seizing the new name is very likely. Kentucky has got these sites by the proverbial "balls"!
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