April 14, 2009 (CAP Newswire) – It’s not a big surprise to learn that an American state with a faltering economy is looking for all the additional tax revenue it can get. Nor is it surprising to learn that, in its efforts to secure that tax revenue, it may want to shut out certain services that it’s not able to tax.  

But when that state chooses to ban a certain form of gambling that it’s unable to tax not only within its own borders but also on a worldwide basis, that makes the situation a bit more controversial.

The state of Kentucky generated a lot of commotion late last year when it attempted to seize 141 online gambling domain names. While this isn’t technically the same as banning online gaming worldwide, it’s close: Taking away some of the most popular online poker domain names from the companies who run them would mean a huge decrease in the accessibility of some of the world’s most popular poker websites (including such big names as PokerStars and Full Tilt Poker).

Its justification for seizing international property over which it had no rights? Since the sites offered services that were illegal in Kentucky, they must be not only banned from Kentucky but shut down completely so no Kentucky citizen could have access to them. In other words, if it can't be taxed, it must be eliminated altogether.  

Such a dramatic act to limit its citizens’ rights to gamble was even more shocking given the fact that Kentucky Governor Steve Beshear was elected partially on a promise to expand casinos in the state. And it’s also put in perspective by the fact that Beshear is now lobbying to increase video slots in the state to raise some much-needed tax revenue.

"I've been a proponent of expanded gaming," Beshear recently stated to a crowd of several hundred voters. "Most of the polling that I've seen on this issue, about 80 percent of the people in this area support expanded gaming in some form.”

Does that “expanded gambling” include Internet gambling? Yes, but since that can’t be taxed, it’s off the table in Kentucky.   

Of course, given that Kentucky is famous for its horse race betting, this double-speak was called out as such from the very beginning. But, since the Kentucky domain names case is still open for appeal, the iGaming industry should be prepared for another attack from Beshear and his legislative allies. This time, however, the iGaming industry has forewarning, and can see the issue with a bit more context — and perhaps be better prepared because of it.

Read more about Kentucky’s efforts to legalize video slots, and Governor Beshear's statements on the topic, here.    


Related posts: