Kentucky Gambling Revenue Plan May Ruin Online Casino Case

As Kentucky's budget crisis grows more dire, gambling is seeing growing support as a method of funding government services, even if it pulls another legal limb from beneath the faltering forfeiture suit.

While Kentucky officials stubbornly pursue the attempt to seize online casino domain names to the state Supreme Court, lawmakers are expected to review proposals to legalize casino gaming in the state. As Kentucky's budget crisis grows more dire, gambling is seeing growing support as a method of funding government services, even if it pulls another legal limb from beneath the faltering forfeiture suit.

Governor Steve Beshear shifted state funds this week to keep the public defenders' offices open, moving $2 million to prevent the Department of Public Advocacy from running out of money before the end of the fiscal year in June. Meanwhile, state prosecutors are taking unpaid layoffs of up to three weeks due to lack of funds.

Hopkins County District Attorney David Massamore said he expects the General Assembly to revisit casino gambling this summer, and he hopes they legalize it to bring new revenues to the state.

"You may not approve of gambling but it is better than raising taxes and it would help solve the budget problem in the state," said Massamore.

Beshear said economists are predicting the budget deficit will increase significantly without new revenue sources.

But the court case suing to seize the Internet casino domain names will be even harder to push, if casino gambling becomes legal instate, said gaming law observer Ryan Paulson.

"Kentucky already faces the uphill battle of proving the appellate decision wrong. By legalizing casinos, it opens up even further the contention that the case is a protectionist movement, blocking competition from out of state, as forbidden by the Commerce Clause of the Constitution," Paulson stated.

Still, Paulson said, Kentucky leaders may find taking the sure revenues of casinos a far better option than chasing a poorly-thought, ill-advised court case that only wastes state money.