Umm, its a lot more complicated then that. The addresses are resolved using DNS server, so you could have competing DNS updates changing the addresses on the fly. (Ky send update changing the ip to a Ky site, the gambling site owner sending a competing request changing the ip back to their original site, and so on) It would be like sending two letters (to the same address) one minute apart, and having the first arrive in Paris, while the next letter get sent to Ky. I don't think the DNS system was set up or designed for this kind of thing (automated competing update requests would resemble a DNS DoS attack), so it would cause lots of problems.

The trump here is that the top level DNS server for the .com space is located in the US, whereas the off-shore gambling sites are not, so Kentucky has a legal advantage here.

btw, this is not the first time this has happened. A few months (years) back, a Spanish travel agency had its .com domain name seized because it arranged tours of Cuba (for Europeans) because the .com registry was located in the US.

Is it any wonder that the rest of the world wants an international body overseeing the internet.