KENTUCKY: State lays out cyber-gambling case

[clevfan]

Posted on Sat, Oct. 04, 2008

State lays out cyber-gambling case

By Roger Alford
Associated Press

FRANKFORT — Lawyers provided sharply conflicting views Friday about whether a Kentucky law against gambling can be enforced in cyberspace.


The Kentucky Justice and Public Safety Cabinet is trying to block access to online casinos in the state, citing a state law that bans "illegal gambling devices."


The move could affect some of the world's most popular gambling sites.


Lexington attorney William C. Hurt Jr. laid out the state's arguments in a legal brief filed Friday. He contends the state has a right to seize the domain names of gambling Web sites because they constitute illegal gambling devices.


Louisville attorney R. Ken yon Meyer countered in a brief filed Friday on behalf of the Interactive Media Entertainment and Gaming Association that Kentucky doesn't have jurisdiction in the case, that seizing domain names would be unconstitutional and that domain names can't be construed to be devices.


The state asked Franklin Circuit Judge Thomas Wingate last month to give Kentucky control of the domain names of 141 gambling Web site accessible by Kentuckians. Wingate hasn't yet ruled on the request.


"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," Democratic Gov. Steve Beshear said at the time. "They are leeches on our communities."


Kentucky allows gambling at horse tracks, in bingo halls and in a state-run lottery. Blocking gambling Web sites, Beshear said, would protect those operations from unwelcome online competition.


Jennifer Brislin, a spokeswoman for the Justice and Public Safety Cabinet, said the state also wanted online casinos to reimburse the state for lost revenues, which Beshear said could total millions of dollars.


Some online casinos have cashed out in Kentucky since the lawsuit was filed. Goldencasino.com notified Kentucky account holders by e-mail last week that its Web site will "no longer accept play from residents of Kentucky."


Beshear, a pro-gambling governor who made legalizing casinos a centerpiece of his election campaign last year, said gambling Web sites are different in that the operators neither pay taxes to the state nor provide jobs.


The Democratic governor pushed the state legislature this year to approve a ballot referendum that would have legalized casino gambling. Beshear said allowing casinos to open, then taxing them, would have raised some $500 million in additional state revenue. Kentucky lawmakers rejected the proposal.


Hurt asked Wingate on Friday to schedule a hearing for attorneys representing gambling Web sites to make their best arguments against forfeiting the domain names.


Meyer asked that the state's lawsuit be dismissed.