Kentucky Supreme Court Favors State In Online Gambling Case

The Kentucky Supreme court issued a ruling Thursday that it will not lift the freeze by registrars of 141 Internet gambling domain names unless an owner of the names comes forward.

The ruling by the Court is not final, but the decision is being viewed as a temporary setback by the affected parties.

"In the written decision, the Court clearly indicates they agree with our arguments, and are inviting us to refile, so that the technicality of the standing issue can be resolved," said Joe Brennan, Interactive Media Entertainment & Gaming Association (iMEGA) chairman.

"It's unfortunate, but I can't imagine that Kentucky's lawyers will celebrate a ruling that says 'bring us an owner, so we can rule in your favor'".

iMEGA and the other affected parties, Interactive Gaming Concil and Sportsbook.com, have up to 20 days to file a motion for reconsideration. In the ruling, the Kentucky Supreme Court indicated that no additional briefs or oral arguments were necessary for them to consider the case, and that a petition could be made to the Appeals Court to move the case immediately back to the state Supreme Court.

"All along, it seemed the Court wanted to go our way, and this decision today indicates that is still the case," Brennan said.

"The Court is telling us that all that is necessary is for one domain owner to come forward, and we likely win."

Brennan indicated iMEGA would immediately work with other parties to resolve the Court's issue, and would quickly file a motion to satisfy the Court.

"We obviously would have preferred a complete, clean victory today, but reading the decision, it seems this is a technicality that is only delaying the inevitable," Brennan sai
 

 

Churchill Downs Buys Youbet.com For $126 Million

Churchill Downs Inc. (CDI), home of the Kentucky Derby, has agreed to buy online horse wagering firm Youbet.com in a cash-and- stock deal valued at $126.8 million.

The deal would give Churchill Downs over $700 million worth of the $1.4 billion online horse wagering market. Churchill Downs already owns online horse betting site TwinSpires.com.

The deal will give Youbet shareholders 97 cents a share in cash for each Youbet.com share, plus 0.0598 shares of Churchill Downs stock. Based on the closing price of Churchill stock on Tuesday, the transaction represents a per-share value of Youbet stock of about $2.84. Once the deal closes, Youbet shareholders will own 16 percent of Churchill stock.

Churchill says less than 14 percent of all wagering on U.S. Thoroughbred racing is estimated to be placed online, but it anticipates that percentage will continue to grow.

"We believe this combination should enable us to accelerate the development of new technology-enabled features and services that horse racing customers who wager via the Advanced Deposit Wagering channel want, and that can attract new customers to racing, said Robert L. Evans, Churchill President and Chief Executive Officer.

"While we expect to make many exciting improvements for customers, our existing TwinSpires.com customers will be able to continue to access their accounts and make wagers, deposits and withdrawals in the same manner they do today."

Churchill said the deal will result in annual saving of $10 million. The transaction is scheduled to be completed in the second quarter of 2010.

 

Have You Read This?

>Legalized Online Gambling Would Bring In Billions

>Kentucky Supreme Court Hears Online Gambling Case

>Appeals Court Upholds Online Gambling Ban

 

Appeals Court Upholds Online Gambling Ban

The U.S. 3rd Circuit Court of Appeals in Philadelphia upheld the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, rejecting that the law was vague and violated individual privacy rights.

The law was challenged by the Washington, DC-based trade association Interactive Media Entertainment & Gaming Association (IMEGA), on behalf of the Internet gambling industry.

In their ruling, the judges clarified that the legality of Internet gambling transactions depended on state law where the bettor was located, and the laws where the betting operator was located. The court pointed out that UIGEA did not establish a blanket federal ban on Internet gambling.

"It bears repeating that the Act itself does not make any gambling activity illegal," wrote Judge Dolores Sloviter. "Whether the transactionconstitutes unlawful Internet gambling turns on how the law of the state from which the bettor initiates the bet would treat that bet, i.e. if it is illegal under that state's law, it constitutes "unlawful Internet gambling" under the Act."

Joe Brennan Jr., IMEGA's chairman said that its members were disappointed that the court did not overturn the law, but the ruling did have some positive aspects.

"The court made it clear - gambling on the Internet is unlawful where state law says so," said Brennan. "But there are only a half-dozen states which have laws against Internet gambling, leaving 44 states where it is potentially lawful. It's not perfect, but it's a good start."

Brennan also said in deferring to state law, the courts decision is consistent with traditional gambling law in the U.S.

"States have always held the power to regulate gambling in this country, not the Federal government," said Brennan.

"The court's ruling seems to say 'back to the future' when it comes to regulating Internet gambling, so we will turn our attention to the states to make the case that this industry can be properly regulated and produce badly needed tax revenue."