Kentucky Says Show Me the MoneyCommonwealth Looking to Take More Than $1 Billion From Sites |
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Kentucky is attempting to force 141 online gambling sites and companies, including online poker sites, to collectively pay it more than $1 billion or risk losing their domain names around the world.
The commonwealth is attempting to use a law that allows officials to seize devices used to gamble illegally to seize poker and casino domain names globally. A forfeiture hearing has been rescheduled for Dec. 3.
Attorneys for several of the companies visited Kentucky last month to explain to Judge Thomas Wingate how the commonwealth is overstepping its legal boundaries, but he was only partially swayed.
But instead of completely letting the companies off the hook, he gave the sites on the list a relatively cheap way out of the situation. Wingate said that if the companies stop doing business with Kentucky residents by December, they will not have their sites handed over to the commonwealth, nor will they have to pay retribution.
But according to Jeff Ifrah, the lead attorney for Interactive Gaming Council, who represents more than 50 of the companies whose domain names wound up on a list that Kentucky officials are attempting to seize, Kentucky and its private attorneys will do everything they can to make the sites pay up, despite the judge's ruling.
Wingate already signed a seizure order in a closed-door hearing with only representatives of Kentucky and is expected sign a forfeiture order in December. If Kentucky actually gains control of the sites’ domain names, then it will use what Ifrah is calling “extortion” and hold the sites hostage until they pay up.
The bill is going to cost the companies more than cash. The commonwealth notified the sites that certain criteria must be met before the sites can be officially de-listed from the forfeiture sheet. A sit-down meeting with company officials must take place, and the companies must hand over documentation noting the sites owners, directors, and officers. Ifrah says the sites will not allow that to happen.
MicroGaming, which through its poker network runs about 40 online poker rooms, has already acted. Before November even came around, the company was the first on the list of 141 to “geo-block” Kentucky residents from accessing its gambling products.
How Kentucky will take possession of the sites is another question altogether.
Online companies register their domain names with companies like GoDaddy, eNom, and Network Solutions. There are more than 500 registrars globally, and many of them are located outside of the United States. Cooperation from these registrars would be required in order for Kentucky to take possession of the gambling sites’ domain names.
None of the sites that Ifrah represents use U.S.-based registrars, and it is doubtful that the foreign-based registrars would simply cooperate with the commonwealth and hand over the sites, but they could.
If that happens, lawyers hired by Kentucky will hold the sites until they agree to the strict terms the commonwealth is trying to dictate, terms that the sites will find hard to meet.
This case will not be over in December. Judge Wingate has already told Golden Palace, who submitted an affidavit trying to prove it doesn’t belong on the list, that a hearing needs to take place in order for him to decide. Ifrah believes that will most likely be the case with all of the companies trying to save their domain names.
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