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Kentucky Supreme Court Appears to Side With Online Gambling Sites

Thursday was an important day in the case of the Commonwealth of Kentucky attempting to seize more than 100 Internet domain names of online poker and gambling Web sites. And it seemingly went well for those on the side of online operations being allowed to retain their domains.

The parties (the Commonwealth of Kentucky and the Interactive Media Entertainment & Gaming Association) presented their case in front of the Kentucky Supreme Court. The drama began in the fall of last year, when Kenucky first tried to seize control of about 140 domains, some of them poker-related. An appellate court said Kentucky could not do this, and the case has been in the legal system ever since, with Thursday’s Supreme Court hearing the most important step yet.

The case could have wide-ranging effects. If the court finds for Kentucky, then the domains would be closed for the entire world, since Kentucky would take control of the domains and shut them down.

Kentucky’s case: It says gambling over the internet is illegal, and they have the right to take action to stop it from happening within its borders. That includes seizing of domains. “They have been using these [sites] to violate the law in Kentucky. They are subject to forfeiture,” said Eric Lycan, an attorney for Kentucky, during the hearing on Thursday. Kentucky is citing a law that allows seizure of gambling devices. However, the law has only ever been applied to physical devices like slot machines and casino tables.

Obviously, iMEGA and the affected online operations disagree with Kentucky’s stance, saying the commonwealth is overstepping its bounds. They contended that seizing domains under the same law that allows seizure of slot machines is ridiculous. “What the Commonwealth and what the Secretary are doing is really unheard of,” said Jon Fleischaker, an iMEGA attorney. “They have taken a statute that has been repealed… and have tried to make it a hybrid with a criminal process for forfeiture. That is really wrong.”

While it would be difficult to read much from the proceedings, there were several comments from the court that could be interpreted as siding with iMEGA and the sites.

– “I’m really, really concerned about the nature of this proceeding,” Justice Will T. Scott said..

– Justice Lisabeth Abramson asked, “Aren’t you just trying to use a 30-year-old statute that talks about tangible property to get to Internet gambling?”

– Abramson again, question the efficacy of taking action by the commonwealth. “If they just adopt a new domain name under the same (Internet provider) address, then what? Do you start all over?”

A decision could be handed down within weeks, but it could take up to four months for a decision. More on the case as details become available.

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