Posts Tagged ‘kentucky gambling law’

Unintended Effects of UIGEA Encroaching Online Revenue for Horseracing Industry

Wednesday, July 7th, 2010

It looks like more than just online casino operators have some “ish” with the U.S. online gambling ban – Unlawful Internet Gambling Enforcement Act – infamously passed under the Bush administration back in 2005 as part of an attachment to a port security bill. Surprisingly enough, it’s the same folks who would seemingly have benefited from the UIGEA, who are now complaining about, well, it’s ineptness.

Here’s a little background: When the UIGEA was passed, it basically banned all forms of online gambling, except for parimutuel horserace wagering and fantasy sports betting. I know, go figure. How are those any different than other forms of gambling? Anyhow, the only problem was that – despite the carve-outs – there were no guidelines on exactly how financial institutions and online payment processors would successfully go about filtering all of the different types of internet wagering transactions, i.e., online casinos, poker rooms, sportsbooks, bingo, skill games etc.

As a result, credit card companies are now erring on the side of caution and blocking most, if not all transactions that come through online betting websites. There simply is no way to confidently identify which transactions are allowed and which are not. Whereas there was more wiggle room for credit card companies during the last four years, now that the UIGEA has gone into effect (as of this year basically), online betting websites are now experiencing a spike in blocked transactions, some of which are apparently “legal”.

And not that U.S. players are not finding ways to gamble at online casinos (because they are), it’s just simply a big fat mess on the regulatory front. Looking back, Congressman Barney Frank’s labeling of the UIGEA as the “stupidest law ever passed” rings even truer today. So, while Barney Frank and others are working to get the UIGEA overturned and new legislation passed to effectively regulate online gambling, other politicians with interests in parimutuel horserace wagering are looking to pass legislation that would clarify the vagueness of the UIGEA.

Introducing House Representatives Scott Murphy (New York Democrat) and Brett Guthrie (Kentucky Republican). Basically representing the two largest horseracing jurisdictions in America, the pair are teaming up to drum support for the “The Wire Clarification Act”, aka House of Representatives 5599. The legislation, if passed, will apparently provide clarification that the Wire Act (the original bill that apparently made internet gambling transactions illegal, despite the fact that the internet didn’t even exist at the time) is not applicable under regulated activities of the Interstate Horseracing Act.

Now, I don’t know about everyone else, but does it seem strange there is no mention of the UIGEA in this bill? I mean, wasn’t the UIGEA supposed to supersede or at least clarify The Wire Act? It’s as if nobody wants to even touch the UIGEA. Why that is, is well, anybody’s guess. Stepping on toes maybe? Or is this a concession to the overall view that the UIGEA is such a messy bill that will eventually become null and void, and so why bother with it? It definitely makes you wonder.

In the meantime, Congressman Murphy from New York says the $210 million brought in from the Aqueduct Racetrack, Belmont Park and Saratoga Race Course last year, contributed $18.5 million to the New York Racing Association, and that the industry itself is now worth $39 billion, with online wagering making up a “substantial portion” of said revenue.

USA Online Gambling Regulatory Update: Frank’s Bills Delayed; Amendments in Mass

Tuesday, April 13th, 2010

Currently, there are several areas in the U.S. online gambling legislative landscape that are experiencing a major upheaval. One, of course, is the overall federal stance toward online gambling as a whole in the States. The other resides on a State level, which at this time, is primarily being soaked up by Kentucky and Massachusetts. In other words, no other two States are making as many headlines in regards to online gambling legislation.

Not that I’m sick of talking about Kentucky (okay, maybe I am), it’s just that what is happening in Massachusetts is more about legislation than the legal battle currently taking place in Kentucky. As reported earlier last week here at OCS, Massachusetts is currently seeking to expand gambling. However, certain provisions slipped into the legislation would call for an outright ban of online gambling – going so far to impose a prison sentence on those who participate in online gambling.

The latest word on the street in Massachusetts is that several alternative proposals have been given to amend the legislation, including several dealing specifically with online poker. These include a provision introduced by House Representative, Robert Nyman, to provide an exception within the online gambling ban to games of skill, including online poker. Other proposals seek to ban all forms of online gambling other than online poker.

So yes, the online poker industry definitely has their fingers in this one, folks. This is no surprise considering how big online poker has become in the US over the last ten years, not to mention the lobbying power of groups like the Poker Players Alliance (PPA). Just how the final bill turns out in Massachusetts is anybody’s guess, although proponents of the original bill are already claiming victory. Their belief is that the bill will easily pass the House, and will, perhaps, see some amendments in the Senate.

As for the federal debate on online gambling, it looks like Barney Frank’s bills to overturn the UIGEA and provide regulatory guidelines is being postponed for a hearing to take place in the House Financial Services Committee. By no means up for a markup (just yet), the two bills will be scheduled for a hearing in due time as the Committee tends to previously scheduled matters.

True Poker Owner Comes Forward in Kentucky Domain Name Case

Friday, March 26th, 2010

Honestly, I am totally sick of talking about Kentucky and the online gambling drama that has been taking place here for the past year-and-a-half. But you know what? I am going to keep talking about it, because when you look at the big picture, it’s all about principle is it not? The domain name seizure instigated by Kentucky Governor, Steve Beshear, is more than about online gambling legality and protectionism. It is about internet rights and your rights as a U.S. citizen.

It makes sense then that the Interactive Media Entertainment and Gaming Association (iMEGA), whose mission is to foster and promote innovation, openness and freedom on the internet,  is taking the lead and representing the multitude of online casino, poker and sports betting operators affected by the domain seizure – 141 domains to be exact. Some of you may recall that iMEGA was seeking to file a motion with the lower Court of Appeals to overturn the domain name seizure, which included several well known online casinos, poker rooms and sports betting sites.

The only catch is that Kentucky’s Supreme Court thinks an industry group like iMEGA doesn’t have legal standing to represent anonymous parties. In other words, as Online Casino Suite reported just last week, the Kentucky high court says the domain name owners must come forward in order for the appeal to go forward. And now, that’s precisely what one site owner is doing.

Yatahay Ltd., which owns the domain name, is having iMEGA file a new motion on its behalf. Serving as the guinea pig, so to speak, Yatahay’s fate in the case (which will likely be no worse than having the appeal denied) could stand as the precedent for all other domain name owners to come forward and challenge Governor Beshear’s outlandish and unprecedented actions against internet freedom.

As you can imagine, there is still plenty more to unfold in this case. And yes, OCS will be reporting on it. As much as I will do my best to keep from bashing Governor Beshear with some straight up basketball trash talk and gagging when I hear the name of Kentucky, I can make no promises.

Kentucky Supreme Court Wants Online Casino Domain Owners to Come Forward

Thursday, March 18th, 2010

Online Gambling Hater Governor Steve Beshear Schmoozin' it up at Kentucky Derby

Kentucky Governor, Steve Beshear, must have gambled online at an illegitimate online casino, and got taken for a chump’s worth, ’cause he certainly has some one-sided views on the online gambling industry as whole. I think back to the time when Beshear filed a civil suit, which successfully (don’t even ask me how) managed to seize some 141 online gambling domain names on the premise that they were corrupting the youth and stealing money from Kentucky citizens.

Ladies and Gentleman, the esteemed Governor Steven Beshear: “Unlicensed, unregulated, illegal Internet gambling poses a tremendous threat to the citizens of the Commonwealth because of its ease, availability and anonymity…The owners and operators of these illegal sites prey on Kentucky citizens, including our youth, and deprive the Commonwealth of millions of dollars in revenue.  It’s an underworld wrought with scams and schemes.”

stevebeshearkentuckyderby01I especially love when Beshear says “unlicensed, unregulated, illegal”. Uh ya Steve, that is why some people think it better to regulate. If we regulated, like they do across the pond, well then, you wouldn’t have online casinos corrupting your precious children and stealing money from your constituents – because, let’s face it – you do that already! Lets not even talk about your loyalty to the horse betting industry. What’s that you say? It’s much better for the kids to wager on wild animals pumped up with performance enhancing drugs? But of course it is.

Anyhow, before I go on (because believe me, I can), allow me to make a long story short and say that the Kentucky debacle is far from over. Following the aforementioned domain seizure, the online gambling industry – led by the Interactive Media Entertainment and Gaming Association (iMEGA) – has been fighting to get the domain names back. Now waist deep in a court battle at the level of the Kentucky Supreme Court, iMEGA was told it had NO standing in representing the owners of the seized domain names, i.e., the online casino operators, and that these individuals must come forward in order for the appeal to go forward.

Personally (simply because it’s me writing this), I can see where the Supreme Court is coming from. And quite honestly, Governor Beshear isn’t totally incorrect in saying that there are some underworld folks doing business in the online gambling industry – thriving more so because of unregulated markets like the U.S. However, I can also see it a little unrealistic to bring in 100+ domain name owners into a courtroom for an appeal’s process. So, as much as I would like to see iMEGA win this one, unless more people step up in the name of “internet freedom”, Beshear is probably going to be laughing all the way to the Kentucky Derby.

Kentucky Rethinks U.S. Online Gambling Ban

Thursday, November 26th, 2009

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.