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Kentucky Rethinks U.S. Online Gambling Ban

26 November 2009 by Devon Chappell

Kentucky: United We Stand, Divided We Fall

The Unlawful Internet Gambling Enforcement Act (UIGEA), aka U.S. online gambling ban, has stirred up controversy since the day it was sneaked into a Port Security Bill near the end of the Bush administration. And just as those most familiar with the ins and outs of the UIGEA cited it as being a highly inept and flawed piece of legislation, predicting it would only serve to cause more trouble than good, the UIGEA is indeed proving to fail only days before it officially goes into effect.

Nothing could be more evident of this than what is currently happening in Kentucky. Stirring up just as much controversy as the UIGEA, Kentucky officials have been bullish (to say the least) toward online casinos, going so far to seize over 100 domain names of prominent online gambling destinations. That’s not even counting the hundreds of thousands of dollars they have attempted to seize from offshore gaming operators.

With all this animosity, you would think that Kentucky was in full support of the UIGEA. They certainly have capitalized off it. However, now there’s a delegate of six Kentucky Representatives urging U.S. Treasury Secretary, Timothy Geithner, to hold off on putting the UIGEA into effect come December 1, 2009, which in effect, would require all banking institutions to begin blocking online gambling transactions – or at least the kind that the UIGEA says are illegal.

Sounds peculiar, doesn’t it? Well, not if you take a closer look at all the holes in the UIGEA. As Congressman Barney Frank calls it, “the stupidest law ever passed”, does not ban all forms of online gambling, although the bill’s strongest proponent, Senator Jon Kyl, says it was written with the intent of protecting minors and family values. Yet, the UIGEA does not ban fantasy sports betting (thanks to lobbying efforts of the NFL) nor horseracing…and there’s the rub.

Kentucky, as we all know, has a large horseracing industry. What was the name of that horse race? Oh ya, the Kentucky Derby. Anyways, the horseracing industry is now worried that the UIGEA will cause “legitimate” horseracing wagers to be inadvertently blocked because the UIGEA does not provide guidelines on how to differentiate online gambling transactions – whether it be poker, online casino, sports bets etc. That responsibility was penned on the banking and financial institutions, which have said since Day One that policing all online wagering transactions would be nigh impossible.

Now that some of these horseracing transactions are already beginning to slip through the cracks, Kentucky is crying like a baby. While the word on the streets since late Wednesday was that Timother Geithner and Fed Chairman Ben Bernanke have compromised to give the UIGEA implementation a six month extension (a rare act to say the least), the Kentucky Representatives likely did not have much to do with it. The credit should be given to Congressman Barney Frank, who also wrote a letter to Geithner and Bernanke, and penned a bill to overturn the UIGEA and regulate online gambling, which is scheduled to go before a House Financial Services Committee hearing on December 3, 2009.

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One Response to “Kentucky Rethinks U.S. Online Gambling Ban”

  1. Gaea Rogers says:

    I don’t know why UIGEA has made a fuss! What’s the difference between horse racing bet and online casino? They are both gambling! At whatever you may look at those, you can’t deny that it is a form gambling. So why they can’t legalize online casino? No one can stop me from playing casino online casino.william hill even the law doesn’t say it’s legal to do so.