Supreme Court Hears Kentucky Domain Name Seizure Case

October 23, 2009 | News Category: Gaming Law

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Thursday, 22nd October, brought with it the return to court of the Kentucky domain name seizure case. The case centers around the attempted seizure by the state of Kentucky of 141 Internet domain names of online gambling sites that allowed Kentucky residents to gamble on their sites.

The lawyers arguing the side of the case against the seizures told the Supreme Court that the effort to seize the domain names had no precedent and was unconstitutional. Jon Fleishchaker, a lawyer representing the Interactive Media Entertainment and Gaming Association (iMEGA), said, "It shows the intellectual dishonesty of the state. They made up the process."

The January ruling handed down from the Kentucky Court of Appeals ruled that the state had no jurisdiction to seize the 141 Internet domain names. The lawyers asked that the Supreme Court uphold this ruling, which notes that Internet domain names are not defined as gambling devices in the state, and therefore cannot be seized using the gambling device seizure law that does exist.

The initial seizure order against the online gambling companies was originally done in secret in the civil court, without informing the companies. The online gambling industry’s lawyers criticized the state for doing this.

A private attorney, Eric Lycan, representing the state of Kentucky, argued that the domain names were seized in this way because they were unable to physically locate the offshore online casino site owners. He said that the only secret is who owns the sites. Lycan even questioned whether the lawyers representing the 141 online gambling sites really have legal standing to defend the case, since they have not produced proof that their clients are, in fact, the owners of the online gambling sites in question.

The governor of Kentucky, Governor Steve Beshear, has been trying to close down the operations of these online gambling sites since he feels they undermine horse racing, which is legal in Kentucky, because the online gambling competition is not taxed. He also claims that there is no protection for the players that they will receive their money, and that these sites make it easier for those wishing to launder money. Perhaps, if these last two points really are a concern of the governor, he should consider working towards protecting Kentucky citizens by helping to regulate and legalize the industry, instead of attacking it!

The executive director of the Poker Players Alliance (PPA), John Pappas, noted that the ramifications of the results of this case are more far-reaching than simply online gambling. Pappas said "This case is about more than playing poker online - it’s about protecting Internet freedom and the individual rights of Kentucky residents. If the Commonwealth is truly interested in protecting consumers, it would put its energy in licensing and regulating online poker - which would also bring in millions in revenue."

It is unclear which way the Supreme Court will rule, and whether they will uphold the appellate court’s decision or not. Once again, the decision by the court could take some time before it is handed down, so with the arguments complete, the waiting game begins yet again.