The Kentucky Derby is big business, but so is illegal Internet gambling in a state characterized by supposed double-standards. Internet gambling is outlawed in Kentucky, just as it is across the rest of the United States, but in this southern state online horse-racing is fair game.

Governor Steve Beshear admits his state relies heavily on the betting sport of horse racing - one that is afforded special online gambling privileges - but he is against online gambling of other kinds for several reasons. These include the inability to regulate illegal operations already running; the inability to tax these concerns and the inability to protect the youth from readily available online gambling. Most notably though, is the competition that online gambling poses to the state money-spinner - horse racing.

How it unfolded
A Franklin County Circuit judge recently ordered 141 illegal, unregulated Internet gambling sites to be taken over by the Kentucky Commonwealth. Now that the domain names have been seized, these companies will have to use available technology to restrict access to Kentucky users or face forfeiture. That hearing will be held by Judge Thomas Wingate on September 25.

It's all about money, and lots of it. Millions of dollars and child-protection issues are at stake. Underage gambling and competition against the existing horse racing industry are the major issues. However the anonymity, accessibility and unregulated nature of online gambling means it cannot guarantee that even winners are being paid out, let alone who gambles.

The law
According to KRS Chapter 528 any gambling devices in websites for Internet gambling will be forfeited by the state. Any profiting from such activity is equally deemed illegal. Governor Beshear is against gambling that allows free choice to individuals, but he is all for gambling that puts money in his budget - that is from activities that can be conveniently taxed. Those online sites that were registered outside the US and inside "safe"' zones will be okay. Others will no doubt struggle for survival as the long-arm of the law reaches ever deeper into cyber-space.

Already affected
Casino affiliate program Star Partners has already had to respond to the Kentucky Court ruling. It has made changes to its websites domains, and released a notice to its affiliates by email, suggesting basic steps to be taken to minimize the effects.

Surely further reverberations will be felt around the online gambling industry, which we will keep an eye open for.