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Poker News | Gambling and the Law

Kentucky Governor Attempts Online Gaming Takeover and Ban

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A direct attack on the online poker industry came on September 18th in the form of a U.S. state governor who attempted to take control of 141 gambling website domain names. Governor Steve Beshear took it upon himself to ask the Franklin County Circuit Court judge to take the bold move in order to prohibit residents of the state of Kentucky from accessing any of the sites.

The request for civil action was filed by Beshear’s office on September 18th, 2008, on behalf of the Commonwealth of Kentucky. The order was a request for “seizure and forfeiture of internet domain names used to promote, conduct, and/or advance illegal gambling within the Commonwealth of Kentucky.” The 141 domain names listed in the court action were accused of violating Kentucky law and were ordered to be transferred to an account held by the Commonwealth of Kentucky. In short, the governor wants the state to own all 141 domain names.

Beshear ran his gubernatorial campaign in 2007 partially based on his support of a state constitutional amendment legalizing casino gambling in Kentucky, but he was unsuccessful in getting the amendment put on the 2008 ballot. Though this recent attempt to outlaw online gaming may come as a surprise, his comments provide reason for his actions.

At a September 22nd press conference at the State Capitol, Beshear said, “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.” He claimed that gambling via the state lottery and at horse tracks and bingo halls has suffered because of online gaming. The sites, he said, “siphon off money from regulated and legal games such as Kentucky’s thoroughbred racing industry, our lottery and charitable gaming activities.”

The sites requested seized by Beshear’s administration included all of the major websites, along with many that are not familiar to most poker players. Ones that stand out, however, are names like PokerStars, Full Tilt Poker, Bodog, Doyles Room, Absolute Poker, and UltimateBet.

The Poker Players Alliance
(PPA), which represents over one million members - more than 13,000 of whom are residents of Kentucky - was on the case within days, issuing a statement from Executive Director John Pappas:

“The Poker Players Alliance is outraged at the actions taken by Kentucky Governor Steve Beshear and the Franklin County Circuit Court to seize the domain names of Internet gambling websites. We believe this action not only unduly restricts the freedom of Kentucky residents to play games of skill, such as poker, online, but sets a precedent for censorship of the Internet by force. Many of Governor Beshear’s arguments - that online poker is illegal, unregulated and with a mechanism to capture tax revenue - are false. Online poker is not illegal under Kentucky law, is regulated in its home jurisdiction and the Commonwealth of Kentucky chose not to license and regulate poker websites.”

The PPA then submitted an amicus brief to the Franklin Circuit Court on Friday, September 26th. An amicus brief is an action that allows a person or group of persons with strong interest in a particular case to organize information and provide awareness to the court about a matter about which it might require more details in order to render a decision. Pappas noted, “The actions by the state of Kentucky are not only extreme, but groundless in that it can be clearly proven that poker is indeed a game of skill and not chance and thereby poker web sites should not be part of the state’s action.” The brief itself included the following points:

•    Expert opinions and extensive research proving that poker is a game of skill
•    Academic, gaming, and artificial intelligence experts citing that poker is a game of skill
•    Kentucky state law wording that “a contest or game in which eligibility to participate is determined by chance and the ultimate winner is determined by skill shall not be considered gambling”
•    Case in question provides no evidence that poker games played on any of the 141 websites in question are based on chance
•    Federal Communications Commission and other state cases verify that skill is a dominant factor in poker
•    First Amendment free speech issues come into play when restricting residents’ access to poker websites that also contain news, blogs, and other information

In addition to filing the brief, the PPA has enlisted the help of its Kentucky-based members to flood the offices of Governor Steve Beshear and other elected officials with letters, e-mails, and phone calls in opposition of the governor’s actions.

The hearing in the Franklin County Circuit Court regarding the Commonwealth of Kentucky action was held on Friday, September 26th, wherein the judge granted a continuance for the case. The PPA released a statement upon the update:

“The Poker Players Alliance is pleased that the court decided to allow for a full review of this case, including arguments for both sides… The continuance granted today will ensure all the cards are on the table and allow the current owners of the domain names of the 141 websites to retain ownership in the interim. The PPA believes that a thorough review of the facts of the case will result in a favorable outcome for the thousands of Kentucky residents who play online poker.”

At this point, with the continuance granted, the domain names of 141 gaming-related websites remain in the rightful hands of their owners. The Kentucky government will now need to provide evidence of their claims that the sites are “leeches” to the court, as will representatives of the 141 defendants. The PPA is staying apprised of all developments in the case and will do whatever legally possible to speak up on behalf of online poker players.

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