In case you don’t keep up on the developments of online gambling law, last week Kentucky Governor Steve Beshear ordered Kentucky authorities to seize 140+ domain names currently owned by Internet companies around the world. (The story.) All of these companies are operating legally in their respective domains, but the governor wants Kentuckians in Kentucky casinos, so he’s decided the domains should belong to the Derby’s home state. (I believe BoDog.com is one of the domains at issue. KentuckyDerby.com — not so much.)
Reason I’m writing about this here is that I’ve exchanged e-mails with Ed Leyden of iMega, a DC-based trade group that defends the online industry in matters such as these. iMega’s involved in this one, too. Anyway, turns out that Kentucky wants to seize these domain names on the theory that they constitute “gambling devices.” Kentucky law defines “gambling device” as follows:
(a) Any so-called slot machine or any other machine or mechanical device an essential part of which is a drum or reel with insignia thereon, and which when operated may deliver, as a result of the application of an element of chance, any money or property, or by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property; or
(b) Any other machine or any mechanical or other device, including but not limited to roulette wheels, gambling tables and similar devices, designed and manufactured primarily for use in connection with gambling and which when operated may deliver, as the result of the application of an element of chance, any money or property, or by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property;
If anyone can come up with an argument that a domain name constitutes a “gambling device” within this definition, please leave a post.
One more thing: Governor Beshear makes no bones about it that this action is all about protecting Kentucky casinos (from which Kentucky makes a bundle) from out-of-state competition — in effect, he wants to prohibit the importation of gambling services to Kentucky to protect Kentucky industry. According to an article in a Huntington, West Virginia paper:
Beshear believes Kentucky is the first in the country to attempt to block online gambling by taking over Web domain names of gambling sites.
“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,” Beshear said at a Monday afternoon Capitol press conference. “They are leeches on our communities.”
Kentucky, home to the Kentucky Derby, already has a state lottery and allows gambling at horse tracks and bingo halls. Blocking internet gambling sites in Kentucky would “protect the signature industry,” Beshear said.
Such sites “siphon off money from regulated and legal games such as Kentucky’s thoroughbred racing industry, our lottery and charitable gaming activities,” Beshear said.
Although Kentucky officials did not have a definite estimate of how much money is being lost to online gambling in Kentucky, Beshear claimed residents were wagering millions online.
Governor Beshear’s plan is about as per se a violation of the dormant Commerce Clause as one could imagine. But what the heck; when it comes to going after online gambling, who cares about the Constitution.

Posted by greenlakenick 


Posted by greenlakenick 



Posted by greenlakenick 






