State getting $6 million from settlement of online gambling suit

bmusgrave@herald-leader.comJune 19, 2013 

Stu Silberman said a cut in early education will be a blow to the state's economy, too

— Kentucky's General Fund is getting an unexpected $6 million windfall from the online gambling industry.

The money, from a settlement in a federal case against two gambling websites, PokerStars and FullTilt Poker, stems in part from the state's effort to crack down on online gambling, Gov. Steve Beshear announced Wednesday.

The extra money will give the state a cushion if General Fund revenue does not meet projections in June, the last month of the fiscal year.

In 2008, the state sued to take over more than 140 gambling websites, saying the companies were operating illegally in Kentucky. It was the first lawsuit of its kind in the country.

Beshear has said online gambling undermines the state's horse racing industry and charitable gambling. It is estimated that online gambling generates more than $20 billion a year, largely untaxed.

Internet groups protested the legal action, questioning how the state could shut down websites that aren't in Kentucky.

While the state pursued that lawsuit in Franklin Circuit Court, federal prosecutors in Maryland and New York brought similar actions in federal court in 2011 against PokerStars and Full Tilt Poker. Kentucky joined the federal lawsuits. The $6 million settlement comes from those federal lawsuits.

The lawsuit in state court has not yet been resolved.

State officials said the state will continue to go after online gambling websites operating illegally in Kentucky.

Beth Musgrave: (502) 875-3793. Twitter: @BGPolitics. Blog: Bluegrasspolitics.bloginky.com.

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