Home -> Law Blog Directory -> Media & Entertainment Law Blogs -> Sports Biz

Media & Entertainment Law

: Sports Biz

Kentucky Sues to Recover Online Gaming Losses

The Great Commonwealth of Kentucky is at again.  Governor Steve Beshear, whose administration is so far best known for being unable to get a casino gaming bill through the General Assembly despite public opinion polls overwhelmingly in favor, has once again decided to take on the online gaming industry.  This time he has dusted off an ancient statute allowing losers of illegal gambling operations to sue to recover their losses.  The suit was filed in late March against Full-Tilt Poker and other unknown entities operating online gaming sites.  As authorized by the statute in question, the Commonwealth is seeking to recover three times the amount wagered by Kentuckians on the sites.

There are several holes in the Governor's legal theory.  First, the statute was passed to allow losers to recover their losses from the operator of an illegal game.  This suit seeks to recover all amounts wager through these suits, relying on KRS 372.040, which can be found here.  This statute, which may never have been tested in court, provides anyone the right to sue to collect treble damages from the operator of an illegal if the loser has failed to do so within six months of losing.  It seems extraordinarily broad to me and certainly not intended to apply to online gaming but to situations in which the gullible player has been duped by a shady operator in the back of a bar, the corner of an alley or a riverboat.   The true purpose of the this section of the stature is lost to antiquity, however, as Kentucky does not maintain legislative history.

A bigger problem for the Commonwealth I think is that none of the games in question actually took place in Kentucky.  Based on that fact alone, I think Kentucky is going to have an extraordinarily difficult time winning this case, at least on appeal,  and that it was filed to help the Governor politically much more than it was a true effort at stopping the scourge of online gaming.

Full post as published by Sports Biz on April 07, 2010 (boomark / email).