Kentucky is suffering budget shortfall

The state of Kentucky, instigator of last year's shocking and unsuccessful attempt to leverage funds from the owners of confiscated global domain names (see previous InfoPowa reports) is suffering from a $456 million budget shortfall, according to Associated Press reports this week.

And state politicians who have been seeking to expand gambling in the Commonwealth have had to put their efforts on hold as the legislature grapples with ways in which the shortfall can be addressed.

House Speaker Greg Stumbo said Friday a proposal to allow more gambling at Kentucky horse tracks has been suspended while lawmakers try to make ends meet.

Stumbo, who sponsored the expanded gambling bill which is being fiercely contested by other politicians and activist groups, said the financial crisis has put his proposal to allow video gambling terminals at seven of the state's eight horse tracks in jeopardy.

"We'll put it on the back burner until we resolve these issues," he said. "I haven't even focused on it."

Stumbo said allowing the video gambling terminals at seven horse tracks could generate up to $1.2 billion in taxable revenue when fully operational. Taxing that revenue could generate up to $340 million a year for the state.

Online gambling observers and Internet freedom advocates alike have been critical of recent attempts by Kentucky Governor Steve Beshear to halt online gambling in order to protect the state's existing land based gambling businesses. Using outsourced lawyers on a contingency basis, the controversial governor tried to have local courts seize and confiscate online domain names belonging to Internet gambling operators around the world.

State spokesmen hinted that the initiative could lead to domain owners having to pay "damages" to the cash-strapped state, but the governor's plans were derailed when the Kentucky Court of Appeals overturned the lower local court's astonishing ruling that Kentucky had jurisdiction over international domain names. A spokesman for the governor has announced that the state will appeal the superior court's decision, but in the meantime all seized domains have been returned to the owners.

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