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Kentucky is on the move - better watch your back.
Recently, Kentucky Governor Steve Beshear moved to seize 141 domain names registered to Internet gambling sites, filing suit in Franklin County Circuit Court. The move, which came with essentially no warning, targets some of the biggest firms. The governor claims the sites are unregulated and "are leeches on our communities."
But he doesn't mean leeches in a moral sense. Apparently, there is nothing wrong with gambling - Kentucky allows betting at racetracks and has a lottery. One of Beshear's primary campaign points was legalizing casino gambling. Doing so, he claimed at the time, would bring an additional $500 million in revenues to the state - to be spent wisely, of course.
No, he doesn't mind gambling. Beshear just wants a monopoly. The hypocrisy of the situation is somewhat astounding: Kentucky residents should be allowed to place wagers with the state and taxpaying companies, but no one else.
Can you imagine if Wal-Mart took such a stance? By Beshear's logic, Target probably steals millions, nay, billions of dollars a year.
Perhaps even more troubling is his proposed solution: Once the domains are transferred to the state, they will be blocked from Kentucky residents. Apparently censorship is an appropriate response to the runaway criminal wave that is online gambling.
It's not like this is new territory for the "gambling" industry. After the 2006 passage of the Unlawful Internet Gambling Enforcement Act, many online sites shut down their U.S. operations, including PartyPoker, the industry leader at the time. After the UIGEA passed, the company's stock price dropped over 60 percent.
Some firms continued, however, arguing that poker is a game of skill and therefore doesn't fall under the umbrella of gambling. At the very nexus of the debate remains the fact that playing online poker isn't even illegal in a vast majority of states. The UIGEA simply restricts financial institutions from facilitating some transactions.
Based on the facts, it seems as though Beshear was simply out to prove a point, albeit a positively stupid one, and the case would be dismissed without much fanfare. Unfortunately, this has not proven to be the case. Judge Thomas Wingate last week denied requests by Interactive Media Entertainment and Gaming Association and the Interactive Gaming Council to dismiss the case. A final forfeiture hearing has been scheduled for November 17.
It should be clear the fight is less over morals and integrity than over dollars and cents (although it certainly doesn't have anything to do with common sense). Beshear is simply using the oft-maligned Internet gaming industry as a vehicle to exert a government-sponsored monopoly - through censorship. Whether you agree with online poker or not is irrelevant. Keeping an eye on this story will be important in the coming weeks, for the outcome could radically shape the future of Internet commerce.
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