Kentucky Appeals Panel Hears Oral ArgumentsThe PPA, Interactive Gaming Council, iMEGA and ACLU Had Say |
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A Kentucky appeals panel heard oral arguments Friday from lawyers representing several online gambling companies and two online trade groups as Kentucky’s attempt to seize 141 domain names used for both gambling and online poker continues.
Kentucky is trying to stop its residents from gambling online by using a law that allows Commonwealth authorities to seize gambling devices used to gamble. In this case, lawyers representing Kentucky claim the domain names are gambling devices.
A Kentucky judge signed a seizure order in September, but the domain names won’t be lost unless a forfeiture hearing rules the Commonwealth’s way.
According to the Lexington Herald-Leader, lawyers made four main arguments to the three judges. They argued that the judge who signed the seizure order, Thomas Wingate, does not have jurisdiction to allow Kentucky to seize domain names in countries that allow online gambling and poker.
They also argued that domain names aren’t gambling devices, that the names only can be seized after a criminal conviction, and that the seizure order violates the commerce clause of the U.S. Constitution.
A forfeiture hearing scheduled in September was delayed pending the results of this appeal's hearing.
Kentucky Governor Steve Beshar gave several reasons for why his state is trying to stop online gambling by seizing the domain names, among them that it is dangerous for children and it undermines Kentucky’s horse betting industry.
What Beshar is not saying is Kentucky is also seeking more than $1 billion from the sites listed on the seizure order. Essentially, Kentucky wants to take ownership of the sites through its courts so that it can force the sites to pay what the Commonwealth will claim is back taxes and damages, according to Jeff Ifrah, an attorney with the Interactive Gaming Council, which counts about 50 companies as members who are involved with this case. They were in court Friday.
Lawyers from the Interactive Media Entertainment & Gaming Association (iMEGA), another online gambling industry trade group, also were heard. Friends-of-the-court briefs on the side of the online gambling industry were filed by American Civil Liberties Union of Kentucky, the Center for Democracy and Technology, Network Solutions LLC, and the Poker Players Alliance.
Wingate gave the sites a sort of get-out-of-jail-for-free card when he told them that they could avoid any kind of prosecution if they stopped residents of Kentucky from accessing them (called “Geo-blocking”). Some sites have jumped at this opportunity, even though the Commonwealth disagrees with this ruling and says it will fight this ruling.
MicroGaming, which operates several dozen online poker rooms on its network, and Tokwiro Enterprises, which own Absolute Poker and UltimateBet, geo-blocked Kentucky’s residents last month.
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