Online casinos have been at war for several months in Kentucky.  Ever since Governor Steve Beshear decided it was with in his power to seize the domain names of 141 online casinos, the online gambling community as been locked in a court battle to preserve the rights of their companies.  However the battle has just taken a funny turn.

The whole reason the Governor Beshear went so ruthlessly after online casinos and online gambling sites was to protect the horse racing industry in Kentucky against people making wagers online.  Online wager managed by foreign companies interfered with the profits from the racing industry and thereby reduced the revenue that the state government could collect in taxes. 

Churchill Downs, one the most prominent raceways in the state just purchased YouBet.com.  YouBet.com is one of the biggest online betting services around and quite a valuable asset to the racetrack.  Churchill Downs purchased YouBet.com at a steal of a price for $127 million.  That is price tag is incredibly cheap when you consider that owning YouBet.com give Churchill Downs more than $700 million worth of the $1.4 billion dollar online horse betting market.

Governor Beshear has yet to respond to the business agreement between Churchill Downs and YouBet.com.  He is not likely to be happy.  However, the agreement seems inevitable.  It makes clear that at least Churchill Downs is starting to understand the value and the growing influence of the online gambling market.  Brick and mortar establishments are going to have to stop waiting for online casinos to go away.