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Taxing Online Casinos Better Plan for Kentucky Than Ban
LEXINGTON, KENTUCKY --
Even as the state fights to eliminate gambling by seizing the domain names of 141 online casinos, Kentucky track officials are saying increased gambling is probably the only way to save the state's thoroughbred industry. Governor Steve Beshear has sought to use the courts to rid the horse racing tracks of competition, but even an unlikely victory in the case leaves horsemen and patrons fleeing the state for greener pastures.
Tracks in nearby states such as Indiana have used slots and other gambling to prop up their racing industries, and increased purses funded by income from racinos has led to top horse owners choosing to leave Kentucky's famed tracks for bigger prizes elsewhere.
A report by Beshear's task force on the future of Kentucky horse racing said, "Kentucky must identify a new source of revenue that is competitive with other states, or the Kentucky Thoroughbred industry will soon be in crisis."
State Representative Greg Stumbo has called for video lottery terminals at state tracks. Other horsemen suggest casino gambling is the best answer, but this would require a state constitutional amendment, and Beshear's last attempt at that never made it to a legislative vote.
Perhaps the best solution involves online casinos. The state is having great difficulty proving that online gambling violates any state laws. If state lawmakers accepted this and took the approach that if it is not illegal, it must be legal, an obvious answer arises. Tax and regulate Internet gambling.
The UIGEA would not prevent the state from receiving its tax share, as it would not be making a gambling transaction but merely collecting taxes from business conducted with Kentucky residents. The Department of Justice under the Bush administration might try all kinds of arm-twisting to get Kentucky to reject online casinos, but the Obama administration is less than a month away, and looks to be much friendlier to Internet gambling.
Could Kentucky citizens have a better Christmas present than the simultaneous acknowledgement of their rights to personal liberty while also creating a strong new state revenue source?
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