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Judge says 'geoblocking' helps states end Internet gambling

Oct 28, 2008 4:03 PM

Burnt Offerings by Stan Bergstein | Last week started as a bad week for the poker players of America, but by week’s end there was a shred of sunshine to sustain their spirits.

First, the tough judge handling the takeover of Internet domain names in Kentucky, Thomas Wingate, ruled that the Poker Players Alliance had no legal standing in the case. At issue is whether Kentucky’s Governor Steve Beshear can appropriate the domain names of up to 141 sites, which would effectively end their Internet business.

The Poker Players Alliance did not claim legal standing, but had filed an amicus "friend of the court" brief saying poker was a game of skill, and as such should be exempted.

Wingate said "Whoa." He said it made no difference in this case, because Kentucky law on the matter simply discussed an element of chance, without specifying proportions or ratios of luck and skill.

Wingate also turned down the argument that a domain is where it is owned and housed, saying it was within a state’s rights to rule on that issue. He said Internet geoblocking was one way for states to bring illegal Internet gambling into conformity with state law.

If you are only providing information and not taking or handling bets, Wingate said, he would dismiss you from the case when it resumes in his chambers Nov. 17. His concern, and presumably Beshear’s and Kentucky’s, is only in blocking Kentucky residents from participating in online gambling, which is illegal in the state. Their confiscating of domains can do that, and it is not just a matter of Kentucky concern.

While the Pokers Players Alliance had not claimed legal standing in the case, the Interactive Media Entertainment and Gaming Association (IMEGA) had, and that status had been accepted in an earlier federal case this year. Wingate, however, is troubled, as is the state, by the non-appearance or even identification of the owners of a number of the 141 sites, and he is demanding they appear in court and identify themselves.

Bigger lawyers and higher courts will wind up with this one, but the Nov. 17 hearing should be lively and entertaining.

The ray of light at week’s end for the sites and their Internet customers came not in the Bluegrass but in Washington, via New Jersey, where United States Senator Robert Menendez, a Democrat, introduced something called The Internet Skill Game Licensing and Control Act of 2008.

The proposal is not likely to see the light of day in 2008, but the American Horse Council, which tracks such things, says it most likely will be taken up early next year.

The bill, S.3616, would authorize the licensing of "Internet skill game facilities," which once licensed could offer Internet skill games.

Menendez identifies those as games "that use simulated cards, dice or tiles in which success is predominantly determined by the skill of the players." He mentions poker, bridge and mahjong, which I last heard of as a boy when my mother was a skilled aficionado. The bill would allow individuals to compete online in games against each other, but not against a "house," and not on sports events or pari-mutuel racing. The latter omission disheartened me, since for all these years I have been making regular deposits thinking I was acting on skill alone. Now, going down with the Wall Street robbers, I discover the truth.

In case you are looking for S.3616 in Washington, it has been referred to the Senate Committee on Banking, Housing and Urban Affairs.

Elsewhere, an interesting scenario played out in New York.

The governor, David Paterson, and the Assembly Speaker, spoke up for Delaware North, one of the biggest sports entertainment venues in the world, to build and run the long-awaited casino at Aqueduct racetrack.

The Republican Senate majority leader, Dean Skelos, whose approval also was needed, said no.

The long-delayed project, said to be costing New York a cool million every day it remains unbuilt, was halted again by the stalemate.

Then a funny thing happened on the way to Election Day.

An important Republican legislator, Serpin Maltese, representing Aqueduct’s district in Queens, is facing a tough Democratic foe next Tuesday. He had been blocking the Delaware North appointment, asking for more community development, and Senate leader Skelos sided with him. Delaware North met with them and promised more than their $370 million winning bid.

That – and the fact that if Maltese lost next week, the Republicans could lose control of the Senate – swung the pendulum. Skelos quickly switched to support Delaware North, and they’re in.

To find out what that means, ask any of the big boys in Vegas. The numbers will be mega-sized and staggering.