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Kentucky Files Case to Get Back Bets Lost Online

Posted on April 8th, 2010

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The state of Kentucky, under Gov. Steve Beshear’s administration, has filed a court case against gambling Web sites in an attempt to reclaim bets lost by Kentucky residents who gambled online. The legal action was filed in late March in Franklin Circuit Court versus Pocket Kings LTD., based in Ireland and operator of the well-known Full Tilt Poker Web site, and some unidentified operators of online gambling sites.

It’s a move that has never been done before against the online gambling industry, and Kentucky is trying to use an old law that’s unknown to most people, but is still legally binding, to recover the money lost by Kentuckians.

Turning to the old law, the government believes Kentuckians can reclaim threefold the money they lost through online gambling. “I think it’s very bizarre,” said Louisville attorney Jon Fleischaker, who represents online gambling Web sites. Justice Cabinet spokeswoman Jennifer Brislin said in a statement that although the law “had its origin many years ago, it still remains the valid law of the commonwealth.”

A law expert, Nelson Rose, said the government of Kentucky attempts to use an old law that still exists in many states’ books. He said as far as he knows, no other state has made a stab at this kind of legal exercise and that he believes the case will be dismissed.

“There are a lot of problems using that statute,” he said. “These are extremely ancient laws that have almost never been used for 100 years or more. The times have completely changed.” The obscure Kentucky law states that in illegal gambling, the winners do not have the right to collect, and losers who pay can file a case to get back three times the amount of their loss.

The law also states that if no case is filed by the loser within six months, “any other person may sue the winner.” Rose said that in this case, Kentucky gamblers are playing with other gamblers, and they win and lose bets made not with the site, but with the other players. But the Beshear administration will respond to that concern by saying the Web sites are winners because they get a fee for running the game.

Fleischaker said not one of the Web sites are based within the state, so it can be argued that the dealings didn’t really take place in Kentucky. He likened it to a situation in which the state sues a casino in Indiana to reclaim bets lost by a Kentuckian who gambled there. Fleischaker also brought up the part of the statute which mentions the phrase “any other person”, and wondered if it can refer to the state, instead of a spouse or child of a gambler.

This is the second lawsuit Kentucky has filed against online gambling sites. The first one filed in 2008 is seeking to seize 141 online gambling sites partly because they were taking away revenue from the state’s horseracing industry.