Kentucky Governor Seeks to Shut Down Threats to State Lottery Monopoly

October 21, 2008

Claiming that their existence hurts the state’s horseracing industry and lottery, Kentucky Governor Steve Beshear (D) filed a lawsuit against 141 gambling websites, demanding that they either be blocked to Kentucky users or seized by the state. Last week, a trial judge refused to dismiss the case and now it heads to trial.

I’m not an expert on gambling law, but I’ll guess that if gambling is illegal in Kentucky, it’s reasonable to demand that those who offer gambling services to Kentucky residents be shut down. But Beshear’s rhetoric and the thrust of his lawsuit focuses more on the fact that these products are a threat to the state’s lottery monopoly. He sounds like a monopolist bitter that anyone is daring to compete with his product:

The governor has called the sites “leeches on our communities” that hurt Kentucky’s signature industry, horse racing. He said Kentuckians spend “tens of millions of dollars” a year on illegal Internet gambling.

Whether all those Internet gamblers would start buying state-provided scratch-off tickets (with their heavy implicit tax) seems to depend on how much overlap there is between “games of skills” and “games of chance.” But if the Governor of Kentucky thinks preserving his state-run monopoly is so crucial, does any activity that diverts people from playing the lotto deserve to get shut down?

Was this page helpful to you?


Thank You!

The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?

Contribute to the Tax Foundation

Related Articles