Rich Muny
July 10, 2009
Despite running for governor on a pro-gaming platform, Kentucky Governor Steve Beshear (D) has unfortunately chosen to lead a protectionist
crusade against online poker. Last year, he authorized an out-of-state contingency-fee only law firm to go to court on behalf of the Commonwealth of Kentucky to seize 141 Internet poker and gaming website domain names, this despite the fact that these sites are operating legally in their home jurisdictions.
Beshear’s underlying theory – that domain names of Internet sites operating legally in their home nations can be taken by any court in the world – is deeply troubling. For example, a few years ago a French court
ordered Yahoo.com to block French citizens from accessing parts of the site deemed to have content unlawful under French law. Yahoo.com pushed back, citing free speech
issues. What if French courts had the authority to seize the domain
www.yahoo.com to force compliance? What if other nations could seize Internet domains to force the entire Internet to comply with their local laws? If Beshear succeeds, imagine the chilling
impact on Internet freedom.
Attorney General Jack Conway wisely steered clear of this issue. In his absence, Beshear had Secretary of the Justice and Public Safety Cabinet J. Michael Brown initiate the seizure action. Beshear and Brown managed to move this case through a state circuit
court, but rightly
lost at the Kentucky Court of Appeals. Unfortunately, Beshear and Brown are not
done. They appealed their loss to the state Supreme Court. One hopes they not only lose again, but that the justices make it clear that Beshear lacks jurisdiction in the matter.
Following the loss at the Court of Appeals, Brown commented, “the evidence demonstrated that illegal and unregulated activity is occurring in Kentucky, and that millions of dollars are being lost as a result of that activity, a fact that wasn’t disputed in Tuesday’s ruling.” Brown’s statement is very misleading. He says this is an illegal activity. However, the court ruled that sites are not “gambling devices” as defined under Kentucky law, and the Commonwealth conceded during testimony that poker players and casino gaming enthusiasts are breaking no laws by playing online. Brown may
think online poker should be
unlawful, but the court did not find any laws to have been broken.
Additionally, the
Poker Players Alliance – a one million member poker advocacy group – filed a brief with the court proving that poker is a game of skill, not chance. As such, they argued that poker is not “gambling”
as defined by Kentucky law. Attorneys made verbal arguments in support of this position at the Court of Appeals
hearing as well, and the Commonwealth’s attorneys did not even try to counter those arguments.
Brown also stated that online poker is unregulated in Kentucky. However, online poker is not regulated by the Commonwealth (it is regulated within the sites’ home jurisdictions) because the Commonwealth
chooses not to regulate it. Likewise, online poker site revenue is not taxed because Kentucky
chooses not to tax it. The Commonwealth is losing money by not creating a legal framework for
online poker, but that’s an issue for the legislature, not the Secretary of the Justice and Public Safety Cabinet.
Governor Beshear claimed that, “unlicensed, unregulated, illegal Internet gambling poses a tremendous threat to the citizens of the Commonwealth because of its ease, availability and anonymity.” However, there is no anonymous online poker play. Poker sites track and confirm ages and
identities of each participant using
authentication systems equal to those used by
Twinspires.com, an Internet horse race wagering site owned by Churchill
Downs that operates in Kentucky. As Twinspires.com’s business is (rightly) acceptable to Beshear, surely the equivalent
systems poker sites employ ought to be acceptable as well.
If Beshear and Brown really wish to help Kentucky’s poker players, they ought to propose legislation creating a
legal framework for online poker. Players would naturally gravitate toward Kentucky-based sites and to
offshore sites that chose to participate, as these sites would be perceived as being safer. Thus, market forces would drive compliance, rather than some scheme to police the entire Internet from the Kentucky governor's office. This would certainly be preferable to the
destruction of Internet freedom and personal liberty. This common sense approach would also provide jobs and revenue to Kentucky while providing strong
consumer protections.
Please tell Governor Beshear that it is time for Kentucky to embrace and manage the technologies of the 21
st
Century while respecting liberty and Internet freedom. Call him at (502) 564-2611, then send him a letter from
this
easy-to-use PPA letter site and from
this similarly easy-to-use FreedomWorks letter site. Let's let Beshear know
it’s time for him to fold.
© Rich Muny
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