My old Kentucky homepage, part one: State declares war on online casinos

Nobody saw it coming: not the online casinos, nor the software providers and certainly not the players. In what may someday come to be known among online gamers as Black Friday, September 19th saw Kentucky governor Steve Beshear file a lawsuit in an attempt to cut access to some 141 online casinos and related Web sites to state citizens. After attempting to close off these casinos to Kentuckians, state attorneys are also seeking financial damages for lost revenue.

The blacklist, the motion
Among the list of 141 domain names seized by the commonwealth of Kentucky were casinos sized everywhere from the small-business level to those of great reputation and long history: online-slot specialists such as AllSlots.com, PlatinumPlay.com, GrandMondial.com, JackpotCity.com and SlotoCash.com dominated the list; virtual poker rooms like DoylesRoom.com, ReeferPoker.com and PokerStars.com faced folding in Kentucky; and even Microgaming.com, homepage for one of the biggest suppliers of online slot game software, earned a spot on Beshear’s blacklist.

The list drew quite a bit of mockery upon its release, however, when Kentucky attorneys’ lack of knowledge on the subject was revealed: Some 42 of the domain names listed are no longer in operation, represented in most high profile by HighRollersLounge.com and LuckyPyramidCasino.com, a pair of online casinos formerly owned by pioneering South African gambling magnate Warren Cloud. Cloud died in June and his holdings were rapidly closed and/or rebranded by another casino group.

By the time the state’s motion was to be ruled on one week later, both sides took further action. Within that seven days, some 31 of the 141 domains listed – representing nearly one-quarter of the total – had been seized or simply changed names. And immediately following Black Friday, Kentucky Justice Cabinet spokeswoman Jennifer Brislin stated that “some online casino companies have already begun to block Kentuckians from their Web sites.” Meanwhile, the accused mostly put their legal eggs into the basket of the Interactive Media Entertainment & Gaming Association (IMEGA).

In the Franklin County court presided over by circuit judge Thomas Wingate on September 26th, IMEGA was granted legal standing and subsequently issued a motion to have the case dismissed. On his part, Wingate put off the scheduled hearing for another week, giving the 141 listed Web sites time to file legal briefs with the Kentucky commonwealth; the hearing has been rescheduled for October 3rd. IMEGA president Edward Leyden was publicly optimistic about the legal situation, stating “I have a good feeling about our motion” and opining that Wingate “is a very straightforward common-sense judge and a thoughtful guy, so we are in good hands.”

Poker players cheated in political game
In good hands in Wingate’s courtroom the online casino community may be, but the message sent from governor Beshear is a negative one indeed. While Brislin claims that “Our objective is not to shut these sites down worldwide” and that “Our goal is to have these internet gambling sites blocked in Kentucky,” the ever-increasingly popular lobbying group the Poker Players Alliance would correctly argue that that isn’t exactly the point.

The Poker Players Alliance filed an amicus curiae to the Kentucky court reiterating the old principle that poker is in fact a game of skill and thus poker Web sites should not be included in Beshear’s seizure. What didn’t end up in the brief submitted to court by the Poker Players Alliance was PPA executive director John Pappas’ declaration that Kentucky’s is now the only government to attempt to ban online casinos “aside from Iran and China and other oppressive regimes.”

Of its currently 1.2 million members – the overwhelming majority of whom play online – Poker Players Alliance figures indicate about 13,000 are Kentucky residents. Beshear, who was highly pro-gambling in general while running for the governorship, garnered the favor (and therefore vote) of many a Kentucky online casino player. Said Pappas, “This action by the governor isn't something that's going to be taken lightly by our membership. They viewed the governor as pro-gambling, and our members helped support him in the election just last year. They view this as betrayal.”

Of course, Beshear is pro-gambling. He’s just pro-state-monopoly gambling.

The state of Kentucky allows gambling at horse tracks, at bingo halls, and in the Kentucky lottery; initially, Beshear’s action was to eliminate online horseracing Web sites within his state. However, the great majority of the 141 online casinos blacklisted deal in casino games and/or poker, a seemingly completely superfluous maneuver that will not only, as Pappas presumes, anger the online casino-going crowd, but could also bring some much heavier federal heat: IMEGA president Edward Leyden thinks that the “protectionist” measure is an “extraordinarily huge question of Constitutional inequity.”

What Beshear doesn’t get
What Beshear doesn’t appear to understand (aside from which casinos’ owners are still among the living and which are not) is multifold. The governor’s plan, which called for casinos to open in Kentucky and thereafter be taxed, would have garnered some $500 million for state coffers according to his figures. But state lawmakers were not moved; clearly, Kentucky legislators do not want land-based casinos.

Equally as indicative of Beshear’s cluelessness about gambling and gambling habits is his belief – one propagated by the more conservative of traditional casino interests – that online casinos somehow steal revenue from land-based casinos. Gee, all he had to do to change this ill perception was read a study out of the University of Western Ontario by June Cotte and Kathryn A. Latour entitled “Blackjack in the Kitchen: Understanding Online versus Casino Gambling.”

A quick quote which deftly summarizes the central theme of the study states that “Casino gamblers perceive online gambling as bereft of social connections, which was pivotal to the enjoyment of gambling for them. The online gamblers also perceive this lack of social connectedness in virtual gambling. But for them, this aspect is positive; it is one crucial reason the online gamblers gave for their choice to stay home and gamble. Many online gamblers chose the online environment because of the perception of the lack of social connections.”

In other words, online gaming is online gaming, casino gaming is casino gaming and rarely do the twain meet.

Except, of course, in Kentucky courtrooms.

Next: Reaction from some of those whose livelihoods were trampled upon.