Jenny Woo Talks To Barney Frank: Online Gambling Not Bad for Economy

As one of the key allies for the online gambling industry, Democratic Congressman Barney Frank has been working diligently to have the Unlawful Internet Gaming Enforcement Act (UIGEA) repealed.  As  chairman of the House Financial Services Committee, Barney Frank oversees housing and banking industries.  He has been especially vocal in recent weeks working hard to help those who are facing foreclosure on their homes and voting on behalf of a $700 billion bailout for the banking sector.

Gambling911.com’s own Senior correspondent Jenny Woo sat down with Barney Frank to discuss his stance on Internet gambling and what he believes will be the future for the industry.

JENNY:  What was it like teaming up with one of the most conservative Republicans, Ron Paul (Texas Congressman) to co-sponsor an online gambling bill?

CONGRESSMAN FRANK:  He’s a libertarian and he’s actually one of the honest ones who really want to help low income people and when it comes to interfering with peoples freedoms.  Ron and I worked together on legalizing marijuana and on opposing some restrictions on free speech.  I refer to him as being a very good ally; he’s a very non-hypercritical conservative.

JENNY:  Why are you so adamant about ensuring that online gambling becomes legalized?

CONGRESSMAN FRANK:  I think it was a terrible mistake that the war of human activity should be divided into two groups, things that the government allows because it approves of them and things that the government prohibits.  The point is that it’s not up to the government to find whether something is a good thing or a bad thing, it’s up to the government to decide whether it would hurt somebody.  It’s a gratuitous interference with adults.  The House responds, according to the bill, it doesn’t add into the gross domestic product, that’s a terribly authoritarian idea that we shouldn’t allow people to do things if it doesn’t go with the gross domestic product.

People would say to me, “do you want to encourage people to gamble”, again that’s a terrible notion.  The idea that the world should be divided in things the government prohibits and things that the government encourages.  The world ought to be filled with a government that let’s people do on their own.

JENNY:  On that same note, why is it that there are those who are so adamant about ensuring the activity remains illegal?

CONGRESSMAN FRANK:  Well some have a religious view about it, which puzzled me because the problem is – there’s something in the Bible that  says gambling is a terrible thing except Bingo? I just don’t understand some of my liberal friends, who should know better, (but) are opposed to it (online gambling).  And I don’t understand why.  Generally my liberal friends have been able to read what they want and there’s something cultural that leads them to be defensive.  I can’t understand what rational arguments that they make against it, but that’s where they are.

JENNY:  You got H.R. 2046 passed through House Committee.  Obviously the year is about to end and we have a new administration coming in, what is the process to get your bill passed?

Fast Facts: What is H.R. 2046? To amend title 31, United States Code, to provide for the licensing of Internet gambling facilities by the Director of the Financial Crimes Enforcement Network, and for other purposes.

CONGRESSMAN FRANK:  The problem that we have now is that after the House Committee passed the bill this administration sort of panders.  The Treasury Department tries to rush through these regulations.  I’m very concerned by that.  We got word that they’re trying to get this approved in this administration.  So prospects for doing this all depends on whether or not they sneak this one through.

JENNY:  Do the odds increase with an Obama administration?

CONGRESSMAN FRANK:  Yes, that would be much better with more Democrats.  Much more support.  I also think with the Obama administration you wouldn’t see these bad regulations.  But what the Bush people try to do is to get this one done very hastily and with little preparation so it’s in place when the Obama administration takes over.  But clearly we have more support opposing (these attempts to stop regulation) with more Democrats in Congress.  I wish it weren’t an issue but the Republicans have made it one.

Did You Know? Just days before the Republican Convention, that party dropped online gambling prohibition from its platform.  But the elation among online gambling enthusiasts was short lived.  The Republican party ensured an amendment was added to make online gambling prohibition part of that platform once again.  But to be certain, Ron Paul is not the only Republican Congressman opposed to Internet gaming prohibition.  It is after all a former Republican Senator who is now chairperson of the powerful Poker Players Alliance.

JENNY:  We know that Senator Jon Kyl was one of the co-authors of the UIGEA; do you see him railroading any attempt to get the bill passed through the Senate?

CONGRESSMAN FRANK:  They don’t have to pass the bill; the bill has already been signed into law.  What I’m worried about is that the bill calls for regulations by the Treasury Department.  That’s what we tried to stop.

JENNY:  We’ve often said you are one of the hardest working Congressman between this and taking center stage with the economy.  With the economic situation deteriorating do you think the online gambling initiative may have to take a back seat for a year?  Or, on the other side of the spectrum, can your bill be passed based on the premise that this is a multi-billion dollar industry that can actually help to fuel the US economy?

CONGRESSMAN FRANK:  No, I think it helps.  I think if we do this right we should make online gaming legal and subject it to a reasonable taxation like anything else.  This does not conflict to our effort to stimulate the economy.  This isn’t bad for the economy.

JENNY:  France and Italy both have taken a complete about face on the subject of Internet gambling.  Last year they were arresting executives of gaming firms, this year both countries have begun to embrace the industry.  What do you think has to happen before these opposing groups can be convinced online gambling can be a good thing here in America?

CONGRESSMAN FRANK:  I wish I knew.  If I had an easy answer I would have put it into effect.  The ones who are notably opposed will not change their minds.  The problem now is that the people who are losing out because of this ban need to get much better organized and each one of them needs to talk to his or her representative and senators.  Especially from the voters who say, “will you please mind your own business and stop interfering with my choices.”

JENNY:  What are your plans for the future?  Barney Frank for President in 2016?

CONGRESSMAN FRANK:  Haha Oh no no.  I’ll be older in 2016 then John McCain is today.  I am very happy with the chairmanship that I have with this committee, it gives me the chance to get a lot accomplished that I want to accomplish.  I expect to serve a few more years as chairman of this committee.

JENNY:  Thank you Congressman.

CONGRESSMAN FRANK:  Thank you.

DRAGON’S DEN ON BBC PUTS GAMING ALERTS BACK IN THE SPOTLIGHT

Viewers of BBC 2 were given another look at the Dragon’s Den episode where two business partners, Emmie Matthews and Ed Stevens, received a £200,000 investment to give their company Gaming Alerts Limited a kick start when the show re-aired recently.

Theo Paphitis decided to make the £200,000 investment for 30% of the company, which was settled after he refused offers of 10 and 25% stake. Many of the other Dragons were a bit skeptical of the business model and decided to pass on the idea, which gave Theo a leg up in the negotiation process. In the end, however, all parties were happy with the deal.

Although Gaming Alerts, http://www.gamingalerts.co.uk/, began with and still does promote all aspects of online gaming, the company soon found that online bingo is the booming industry in the UK, and around the world. The company has since decided to focus more of their attention and efforts on the online-bingo industry.

Additionally, after doing extensive research into the international bingo market, along with their experience on the portal site, the company has launched a new bingo site in Spain. Feriabingo.com, which launched last week, is an exclusively Spanish-speaking online-bingo site targeted for players in Spain.

“After finding out how saturated the market is in the UK, we’ve decided to focus our attention on other European markets,” Ed said. “We’re excited about the new opportunities we have in the works with Theo and hope Spain proves to be a success.”

In keeping with the online-bingo focus, the company launched a new Online Bingo Forum at http://onlinebingoforum.co.uk/, which provides bingo players with a place to discuss their likes and dislikes about the popular operators as well as any other topics of interest. This addition is expected to attract even more bingo players to the site, continuing its growth.

The Gaming Alerts Industry News section is now featured in Google News UK, significantly expanding its overall reach. The site provides only the best online gambling news and continues to attract new readers every day.

Rolling the Dice with McCain and Online Gambling

With the November election right around the corner, Poker Player Newspaper asked journalist Amy Calistri to look at Barack Obama’s and John McCain’s candidacy from the perspective of their positions on gambling and poker. Amy’s piece on Senator McCain follows; her piece on Senator Obama will appear next issue]

 

“This is a very, very superstitious game,” he said. When his turn came to throw the dice, he picked them up and blew on them first. He had placed chips on the number 5, so (envisioning a combination of 2 and 3) he called, “Michael Jordan! Michael Jordan!”

 

In her May 2005 article in The New Yorker, Connie Bruck described John McCain’s love affair with craps, including a friend’s account of how he and McCain used to shoot craps for 14 hours straight in Vegas. When Republican Presidential Candidate John McCain puts his chips on the table, it is clear he likes to bet with the roller. But it is far less clear whether McCain will take the gambler’s side when it comes to online gambling.

 

With the financial sector teetering on collapse, rising unemployment, and military campaigns playing out on two fronts, it is understandable why neither presidential hopeful is featuring gambling as a defining issue of their candidacy. While understandable, it is also frustrating for the many internet poker players who define themselves as “one issue voters,” leaving them to search high and low for clues as to the candidates’ positions on internet gambling. And it may be especially challenging for those trying to pin down McCain, whose gambling policy clues cover the full spectrum, from pro to con.

 

The biggest McCain related internet gambling alarm bell is the 2008 Republican Platform, which is supposed to represent the cornerstone of the party’s agenda. It states, “Millions of Americans suffer from problem or pathological gambling that can destroy families. We support the law prohibiting gambling over the Internet.” The Poker Players Alliance (PPA) worked hard to convince the Republican Party to exclude such language, but to no avail. And just to prove the old adage that politics makes for strange bedfellows, former Senator Alfonse D’Amato and paid lobbyist for the PPA, currently endorses McCain.

 

PPA Executive Director John Pappas stated that McCain “does not have a specific position on Internet poker, but does appear to have been influenced by his fellow Arizona Senator Jon Kyl, who is a vigorous opponent of our rights. McCain, however, has always been willing to consider both sides of an issue and may simply need to know how strongly PPA members feel.” In what appears to be some rationalization for why their lobbyist would support a candidate whose party has a strong anti-internet gambling agenda, Pappas offered, “I can only hope that, should McCain be elected, we’d have some insight into his thought process. If you have someone that’s on the fence on your issue, then what better way to educate him than to surround him with people that understand the benefits of regulation, like D’Amato? We have a great open door to be able to engage him on the issue.”

 

Rationalization aside, Pappas’ assessment of McCain’s personal position on internet gambling appears to be correct; McCain doesn’t have one. In a recent interview, Las Vegas Review Journal’s reporter Erin Neff specifically asked McCain about his views on internet gambling. After a few false starts, and at one point trying to deflect the question by stating that internet gambling was Kyl’s issue, McCain finally answered: “Let me get back to you on it. I haven’t thought about the issue.” I suspect Neff is still waiting.

 

Actions always speak louder than words, but on this front McCain’s positions are also a bit murky. On one hand, McCain was a key architect of the Indian Gaming Regulatory Act passed in 1988. McCain obviously believes that some forms of gambling can be safely regulated. But he clearly doesn’t feel that way about all forms of gambling.

 

In 2001, McCain introduced the Amateur Sports Integrity Act (S.718), a bill that would make it unlawful to wager on Olympic, college, and high school sports. In its final form the bill also included an amendment referred to as the “Unlawful Internet Gambling Funding Prohibition Act,” which read just like today’s UIGEA. It also proposed to cut off federal funding to any institution of higher learning that didn’t effectively monitor students’ funding of online gaming accounts. Granted, the anti-internet gambling amendments were not drafted by McCain, but it does indicate that at one point in his career, he was willing to throw internet gambling under the bus. Ultimately, the bill never made it to the floor.

 

There are no sure bets in politics or gambling. And looking to either presidential candidate to restore sanity to the legal conundrum of internet gambling in the U.S. may be a long shot. But at this point it time, it’s hard to even set the line on John McCain.

Kentucky seizes two gambling domains, sites fight back

Last month, Judge Thomas Wingate of Kentucky’s Franklin County Circuit issued an unusual order that, if upheld, could have a tremendous impact on the online gambling industry. The order gave Kentucky the right to seize control of some 141 gambling website domains on the grounds that accessing these websites was illegal within Kentucky’s borders. The lawsuit was filed by Kentucky Governor Steve Beshear, who campaigned heavily on promises to bring casino gambling to Kentucky. At a hearing this week, a group of trade executives, interested parties, and the Internet Commerce Alliance testified on behalf of the gambling websites, advocating that they be allowed to continue to operate.

Gambling—specifically, horse racing—is a huge source of income and a long-standing tradition in Kentucky. As such, it holds special status compared to other forms of betting, and provides a significant number of Kentucky’s jobs, particularly in the Lexington area (the state’s second-largest city). Beshear’s stance, and Judge Wingate’s reticence to reverse his previous order, however, are at least partially driven by Kentucky’s economic situation as a whole, rather than merely being a result of the Commonwealth’s obsession with horseflesh.

Kentucky is a state with wide disparities in per capita income (PCI) and an average PCI that ranks 44th out of the 50 US States (Suggested new state motto: “We’re still trouncing Mississippi!”). Regionally, average PCI ranges from $32,000+ (Louisville and Lexington), down below the $20,000 mark, as shown in the graph below. A 2006 study (PDF) of this disparity concluded that it would take 154 years for KY to reach the US average PCI assuming current growth rates do not change, and further noted that the wide income differences across the Commonwealth are the result of very different industrial bases. There are, in other words, no cheap and easy ways to raise per capita income in these regions. The state must either find ways to lure new companies to build new facilities in the targeted regions (typically done through tax subsidies and/or exceptions) or provide job training and incentives to aid local economies in their transition. Both options would cost a significant amount of money, and none of the US states are exactly running around with billions in surplus income.

he state estimates that its residents currently spend some $170 million gambling online per year. From the government’s perspective, that money is being doubly wasted: it isn’t being fed directly into the economy to help create jobs, and it isn’t taxable, meaning the state gains no revenue from it. Gov. Bashear isn’t claiming that the state’s fortunes would improve if all the folks in the eastern part of the state got jobs in (or on) casinos, or that they should line up to drop their paychecks off, but the new gambling laws he has pushed for are touted as a way to increase overall state revenue and provide enhanced services to some of the areas that need them badly.

Thus far, the state is holding fast to its claim that domain names represent gambling “devices,” and are therefore a seizable asset. Officials with the state Justice Department have confirmed that the state is seeking unspecified damage from the various online operations, but the primary purpose of the department is to force online gambling sites to prevent state residents from accessing their venues. As Jennifer Brislin, of the state Justice Department, told the Washington Post, “We think [the ability of these websites to operate within Kentucky] creates a tremendous disadvantage for our legitimate, licensed and taxed gaming interests, and there are some damages that are due to the commonwealth as a result.”

Thus far, the state has successfully claimed two domains—Luckypyramidcasino.com and pyramidlounge.com—and has met with officials from GoDaddy.com, which serves as registrar to 20 of the 141 websites named in Judge Wingate’s order. GoDaddy is stuck in an unenviable position in this case, as Christine Jones, the company’s general counsel, explained to the Washington Post: “We issued a registrar certificate to the state that says the court has jurisdiction over the issue, but it doesn’t have control over the domains, other than the ability to exercise judgment so that when there is a final adjudication on the merits of the case or a settlement by the parties, we will honor that outcome,” Jones said.” Read between the lines, and GoDaddy is trying not to throw its customers under a bus without sticking up for them at least a little, but definitely isn’t willing to directly contest the final outcome of the case.

Trade groups and online gambling advocates made their case to Judge Wingate on Tuesday. The judge now has about a week to make up his mind; he can either choose to dismiss the case or allow it to proceed to a forfeiture hearing. If he chooses the latter, you can bet the case will be appealed. It’s currently illegal for US financial institutions to process payments for online gambling sites, but only one other state—Washington—has made it illegal for citizens to gamble online. If Kentucky were to win on appeal, however, it would set an enormous precedent, and could significantly affect the ability of US citizens to access online gaming sites at all.

Attorneys opposing the state, however, say Kentucky doesn’t have jurisdiction on a case that could have international ramifications. “These domain names do not exist here,” said Jerry Stouck, an attorney representing the Interactive Gaming Council, to Forbes. “They can’t be found in Kentucky and therefore they can’t be seized here.”

French Sport’s Governing Body Demands Say in Online Gaming Regulation

The French National Olympic and Sports Committee (CNOSF) yesterday laid out its position with regard to the proposed liberalisation of the French online gaming market, presenting a list of demands that it wants to see incorporated into future legislation.

 At the inaugural meeting of the Action Committee on Online Sports Betting, established by CNOSF to represent its interests at a national and European level, the committee demanded a “legitimate financial return” from online sports betting operators.

 It said it wanted to see a tax of 2.5% levied on sports bets for the benefit of French sports, comparable to that which is currently applied to the state-owned La Française des Jeux.

 

The committee, chaired by Christian Bîmes, head of the French tennis federation, also said that the legislation should enable organisers of sporting events to retain the exclusive rights to their exploitation, similar to the system currently in force in the French sports code. This would allow organisers of sports events to sell sports betting rights in the same way as they do TV broadcasting rights, and on an event-by-event basis.

 The CNOSF added that as a regulator of French sports, it would also expect to be included in any regulatory body that will be established to oversee the online gaming market in order to ensure that the integrity of sports was maintained. Such a body is expected to be established in early 2009 and to subsequently oversee the licensing process.

Opponents to Ky. online gambling case gathering

Online gambling advocates say Kentucky’s governor is entering potentially dangerous territory with his administration’s attempt to enforce a state law against Web sites based across the globe.

Groups opposed to Gov. Steve Beshear’s ongoing civil lawsuit that seeks control of selected Internet domain names say Kentucky doesn’t have jurisdiction and is violating constitutional due process rights. They say the state is seeking to stifle competition and question whether the gambling activity that occurs is even illegal.

“We’re going to fight this one strongly,” said Rich Muny, president of the Kentucky chapter of the Poker Players Alliance.

The Kentucky Justice and Public Safety Cabinet is attempting to block Kentuckians’ access to online casinos, including some of the most popular in the world. State officials claim state law gives them authority to take “illegal gambling devices,” in this case domain names.

Kentucky officials have asked Franklin County Circuit Judge Thomas Wingate to forfeit control of 141 gambling Web sites to the state. A hearing in the case is scheduled for Tuesday.

During his campaign for governor last year, Beshear campaigned on a central theme supporting legalized casino gambling as a way to raise state revenue. Beshear tried and failed to get the General Assembly to put a proposed constitutional amendment before voters that would legalize casino gambling.

Beshear, in announcing the lawsuit last month, said that blocking Internet gambling sites in Kentucky would protect the state’s “signature industry” and called such sites “leeches on our communities.”

“Unlike casinos that operate on land or on riverboats in the United States, these operations pay no tax revenues, provide no jobs and yield no tourism benefits,” Beshear said at the time.

Some groups opposed to the state’s actions met Monday before the hearing.

Derek Hunter, a spokesman for the Media Freedom Project, which is related to Americans for Tax Reform, called the state’s move a “dangerous step” that raises constitutional issues about due process. Hunter said the government should not regulate Internet commerce.

Joe Brennan Jr., chairman of the Internet Media Entertainment & Gaming Association, claimed Kentucky’s move was intended to thwart competition from other gambling interests currently in the state.

Kentucky already allows gambling on horse racing and bingo and has a state lottery.

“These are things that should trouble all Americans because this was all done in an effort to take out the competition,” Brennan said.

Jeremiah Johnston, a spokesman for the Washington D.C.-based Internet Commerce Association, says Kentucky is overstepping into what should be a federal interstate commerce issue. Johnston said the precedent set by the case could have a “chilling effect” on Internet businesses.

“If all of a sudden your company pops up on the radar in some state and they can just take your address, it’s like someone swooping down onto main street and taking your building,” Johnston said. “You’re out of business.”

21Ventures seeds Israeli anti-cheating software for online games maker Cognisafe

21Ventures, a U.S. based venture capital firm, announced today an undisclosed seed investment in CogniSafe, an Israeli company providing real-time anti-cheat software solution for online games.

Cheating in online games is effectively a problem which causes significant losses to gaming companies and harms the players ability to enjoy the challenge and adventure of a cheat-free game environment.

The cheating problem in online games causes game providers to remove tens of thousands of paying players every month, due to suspected cheating. The removal is usually done following a complaint from other players, or after a post mortem analysis of player’s actions. In addition a significant number of legitimate players abandon some game titles, and cease paying, when they feel they have been cheated.

CogniSafe’s solution enables online game providers to detect, in real time, any deviation from proper gaming procedures by the online players, and remove cheaters from participation in the game, thus makes cheating attempts futile and enables other players to continue and enjoy a cheat-free gaming experience.

US venture capital 21Ventures announces seed investment in in Israeli anti-cheat software company CogniSafe Ltd. – Anti-cheat software provider for online-games

21Ventures, a U.S. based venture capital firm, announced today a seed investment in CogniSafe Ltd. – an Israeli company providing real-time anti-cheat software solution for online games .

The funding is earmarked for sales and marketing and ongoing product development.

“CogniSafe brings an exciting new approach to solve the cheating problem in online games, a problem which causes significant losses to gaming companies and harms the players ability to enjoy the challenge and adventure of a cheat-free game environment. Just like online banking and commerce services, the online gaming industry is vulnerable to fraud and cheating, but no real time solution has been presented so far to solve the cheating problem. We believe that CogniSafe solution will become the standard in detection and prevention of cheating in online games and we are happy to be among the first to identify CogniSafe potential” said David Anthony, Managing Partner of 21Ventures.

The cheating problem in online games causes game providers to remove tens of thousands of paying players every month, due to suspected cheating. The removal is usually done following a complaint from other players, or after a post mortem analysis of player’s actions. In addition a significant number of legitimate players abandon some game titles, and cease paying, when they feel they have been cheated.
CogniSafe’s solution enables online game providers to detect, in real time, any deviation from proper gaming procedures by the online players, and remove cheaters from participation in the game, thus makes cheating attempts futile and enables other players to continue and enjoy a cheat-free gaming experience.

“There is a clear need in the market for a real-time solution that will enable the gaming companies to really understand the magnitude of the cheating phenomena, gather evidence against cheaters, and remove them from the game before they affect the gaming experience for other players ”, said Izik Shimon, CEO of CogniSafe. Izik continues “We are already engaged with several leaders in the online gaming industry, which understand the potential of increasing the integrity of their games and avoiding significant losses, by working with CogniSafe”.

About 21Ventures
Founded in 2004 and headquartered in New York, 21Ventures is a venture capital fund which invests in seed, early stage and PIPE (Private Investments in Public Equities) technology companies in the security, clean energy and mobile software markets.  21Ventures has over $250 million in committed capital, in 24 companies in Israel and the United States.  Approximately half of 21Ventures investments are in clean energy companies.

Successful Gambling Regulation

The crux
Online gaming activity is set to top $24.5 billion by 2010 yet widespread global regulation of the industry has yet to take place. The online gambling industry is headquartered almost entirely outside the United States, but almost half its customers reside in the United States. While the United States prepares to open its doors to regulating online gambling, another lesser-known entity is already cashing in, big time.

Alderney – a tiny island some 30 km off the coast of Guernsey- with a population under 2,500, has struck gold. They are now home to a regulated online gambling community and it’s already paying dividends. Its Gambling Control Commission has contributed $6.2 million towards the development of its commercial quay and the money just keeps on coming.

License fees for online casinos cost around £70,000 per annum, and the goal is to get 100 casinos signed up within 3 years. The number of licensed companies in Alderney spiked from 25 to 34 last year. Already gambling takings have translated into £4.2 million cash in the bank.

The process
If applicants can prove their games are fair and honest – with the protection of minors and addicts in mind, that their management is not linked to the underworld then they are eligible to apply. The benefits for getting regulated (white-listed) in Alderney: limitless bandwidth, zero-rated corporation tax, plus freedom to maintain a legitimate and profitable gambling operation. According to Robin le Prevost, e-commerce development head for the States of Alderney, “Interest in Alderney has never been higher.”

It is unrealistic to prohibit Internet gambling because regulation and internal compliance provides revenue and checks and balances on an industry that is experiencing unparalleled growth. Likewise the tiny island of Malta is set to have at least 147 online gambling companies regulated. Perhaps the time has come for other countries to take notice?

Beshear Move Endangers American Online Gambling Case With RGA

Kentucky Governor Steve Beshear has created a hornets’ nest with his attempt to usurp the domain names of online gambling sites. Companies that had felt properly insulated against American prosecution because of servers based in foreign territory now find their Internet identity at risk if the domain name was registered in the United States.

Washington-based Internet domain name registrar eNom, the world’s second largest provider of domain names, has already complied with the Kentucky judge’s order to turn certain domain names over to that state’s Justice Department. According to Point-Spreads.com, both HighRollersLounge.com and LuckyPyramidCasino.com now list administrative contacts at the Kentucky Justice Cabinet.

While sites registered at overseas locations have said their registrars will ignore the court order as without jurisdiction, plenty of conversation is sure to spring up at this week’s Internet gaming conference in Barcelona.

On Beshear’s list of 141 names being sought are such popular sites as PokerStars, FullTiltPoker, DoylesRoom, GoldenPalace and GoldenCasino.

Beshear, who campaigned for governor on a platform that stressed the need for casino gambling instate, has been unable to fulfill his promises of bringing land-based casinos to Kentucky. He uses the facts that the online gambling industry has been unregulated to assert the operators are unsavory, dishonest, and dangerous.

But, even though regulation would cure those ills, it would not protect the state’s horse racing industry. Beshear openly admits he decided to pursue the name grab in order to keep gambling money from being diverted from horse racing, a statement that may cause much damage to the U.S.

After all, the case being brought before the World Trade Organization by the Remote Gaming Association and the European Union accuses the U.S. of exactly what Beshears says he is doing; that is, selectively attacking the foreign online gaming industry to benefit horse racing and other U.S. gaming interests online, such as lotteries.

While the immediate benefit may be to close down a few barely competitive sites, keeping some thousands of dollars (if that much) in Kentucky, the potential penalty the U.S. might pay as a result of the RGA’s ever strengthening protectionism case could be in the billions.