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Kentucky Supreme Court Rules On Internet Gambling Case

Posted on March 25th, 2010

The Kentucky Supreme Court has ruled that owners of Internet gambling sites must turn up in court if they don’t want the state to take control of the domain names and bar the people of Kentucky access to the sites. The owners of the Web sites have remained unidentified, as only Internet gambling associations like the Interactive Media Entertainment and Gaming Association (IMEGA) and the Interactive Gaming Council had represented the gambling sites during the legal battle. In 2008, in an attempt to stop illegal Internet gambling, the administration of Gov. Steve Beshear filed a suit in a Franklin Circuit Court against the Web sites. The Circuit Judge ruled the state could seize 141 domain names of Internet gambling sites that the state claimed were illegally taking wagers from gamblers in Kentucky.

Lawyers of the Web sites appealed to the Kentucky Court of Appeals to prevent the state from taking control of the domain names. The Appeals Court granted their petition, which caused state officials to turn to the Kentucky Supreme Court. The state contended that the gambling associations who stood in for the owners of the sites were not in a legal position to represent them. The justices of the Kentucky Supreme Court, in a 6-0 ruling, said the gambling groups must release the names of the owners of the Web sites they represent. The ruling comes with the chance that even if only one of the domain owners presents himself to the court to confirm legal standing, the case could proceed. The court’s decision failed to tackle a significant but obscure issue, which is, if the state has the legal right to seize domain names operated by companies based outside the state.

The concerned groups say the state is going too far with its authority, but the state claims that the gambling sites are breaking state law by running gambling operations which are illegal in Kentucky. The governor says the untaxed gambling sites are hurting the state’s horse racing industry by unfairly competing with it. Justice and Public Safety Secretary J. Michael Brown said the decision “allows us to continue our efforts to curb illegal Internet gambling.”

A lawyer for IMEGA said Thursday the owners of the Web sites will obey the Supreme Court’s ruling. “All of the parties are going to get together and determine how we are going to proceed and comply with this technical issue. I think it is a very, very temporary setback. It’s a very unusual decision because it signals an interest in the merits of the case and gives us a road map on how to get back to the Supreme Court quickly.”

The state winning the case could have an impact on Internet freedoms around the world, said the Poker Players Alliance. “There are fundamental freedoms at stake in this case, not only the freedom of poker players in Kentucky and globally, but Internet freedom across the globe. The commonwealth’s effort at such a bold, broad and, we believe, unlawful seizure sets a dangerous precedent for anyone who uses the Internet.”