Editorial: A Preposteority Complex

25 September 2008

Kentucky's bid to seize I-gaming domain names on the theory that these are "gambling devices" is preposterous, and on several levels.

To begin with, Kentucky's own legal definition of such things doesn't fit domain names. According to Kentucky Revised Statutes Section 528.010, gambling devices are those things which, "when operated may deliver, as the result of the application of an element of chance, any money or property, or by the operation of which a person may become entitled to receive [them]."

Anyone who is even vaguely cyber-literate knows that a domain name does not "operate" at all, and does not, of itself, pay anybody anything. It not a device; it is a U.R.L., an address. There is no definition of "gambling devices" so broad as to cover that, not even in Saudi Arabia. Someone should tell the bluegrass ayatollahs as much.

The best thing that could be said for Governor Steve Beshear's reasoning is that he knows better. If no one in Kentucky could play poker online, says he, the state lottery and the horse tracks would increase their profits. But when has the horse racing industry -- when has the state lottery made any such claims?

Anyone who has taken even a cursory look at the demographics knows that the three pastimes are patronized by different sets of people. There is no proof that a single dollar destined for the horses or the lottery was diverted by online poker -- and there never can be.

More fundamentally wrong, of course, is the attempt to use the power of the law to cripple competition. Is it "right" to bet on the games licensed by the state, but "wrong" to bet elsewhere? What else is this but raw protectionism, wearing cardboard wings and a tin halo while hefting a tire iron?

The pathetic schoolboy fantasy of Internet gambling as a " threat to national security" with some "connection to terrorism" I leave for the appropriate psychiatrist -- or better, the writers at "Saturday Night Live." At least we can be grateful that the usual cover story of Protecting Public Morality has not been played up. In the state famous for fine horses and fast politics, it just won't pass the straight-face test.

The Kentucky governor's gambit has been called a publicity stunt -- that was an act of charity. What we are seeing is another hypocritical assault on a straw man. Condemning Internet gambling -- or to be precise, the Internet gambling that doesn't give them a cut -- is a staple with politicians seeking a diversion.

Bashing I-gaming is the lowest common denominator of virtue, proof of right thinking, no matter how crooked, incompetent or perverted the accuser may actually be. It is henhouse morality mated to cockroach opportunism, and it is high time we called it like it is.

I rise from below the salt to call Mr. Beshear's lawsuit a rain dance of phony righteousness, a mean-spirited and childish grab for market power on the pretext of avenging toothless old taboos (or is it only me that's noticed Kentucky is America's biggest supplier of the race horses that everybody gambles on? Or that the governor just happened to have proposed 12 -- count 'em, 12 -- land-based casinos?)

That this maneuver comes in an election year is no surprise. I would be willing to bet this spasm of public virtue has been aired just as other, more serious matters loom close to the old Kentucky home. Watch the news for the next few weeks. It will be interesting to see just what our attention was supposed to be diverted from.

One thing's for sure: The villain with the people's money in his pocket won't be the online gaming business.

Mr. Owens is a lawyer in Sacramento, Calif., specializing in Internet gambling law. Released in 2005, he coauthored "Internet Gaming Law" with Professor I. Nelson Rose, America's senior authority on gambling.