Kentucky judge mulls online gambling case

Hands tied

After hearing arguments in the online gambling domain name case today in Kentucky, Judge Thomas Wingate will be taking time over the next week to review both sides before making a determination as to whether the state of Kentucky can seize online gambling domain names.

Online gambling is considered to be illegal in Kentucky, and the hearing today was about whether Kentucky Governor Steve Beshear has the right to seize and then obtain the forfeiture of 141 gambling Web site domain names that are accessible to Kentucky residents.

The issue was thrust into the spotlight when the state obtained an order seizing the domain names on Sept. 18, without notice to any of the affected domain names. A hearing was then set for Sept. 26 to discuss the forfeiture of the domain names.

Representatives of the affected domain names were in court for the forfeiture hearing, during which the judge granted a postponement in order for the defendants to have time to file briefs and adequately prepare their arguments.

During the postponement, none of the domain name ownership had to be turned over to Kentucky. Judge Wingate also decided today that the domain names and their associated sites will remain as is while he's making his decision.

Judge Wingate is expected to present his decision Oct. 15, giving him a week to review the arguments from the state, which was represented by private attorney Robert Foote rather than the State Attorney General, as well as the arguments from the several attorneys representing the online gambling sites.

The state of Kentucky is arguing that the domain names constitute illegal gaming devices in the state, and therefore can be seized and forfeited to the state - a move Governor Beshear is hoping to employ to stop online gambling in the state.

However, many of the attorneys for the defendants pointed out in the hearing that the state hasn't shown any proof that illegal activity is taking place in order for the state to have the right to seize the domains, nor has it proven that the sites have reached into Kentucky.

Some attorneys argued as well that it has yet to be determined that a domain name would constitute a "gambling device" under Kentucky law. A domain is just typed letters, not an actual mechanical device used for gambling.

According to a Forbes article, attorneys opposing the state also said Kentucky doesn't have jurisdiction on a case that could have international effects.

Jerry Stouck, an attorney representing the Interactive Gaming Council, said that the domain names don't exist in Kentucky - that they can't be found in the state, and therefore can't be seized there.

Edward Leyden, representing iMEGA, pointed out that the Commerce Clause of the Constitution forbids states from regulating commerce, and they're specifically denied the ability to discriminate among businesses as a way to prevent competition.

Governor Beshear campaigned on a platform that included bringing more gambling to the state of Kentucky. His move to stop online gambling in the state could be construed as a way to eliminate competition for the state's horse racing and state lottery as well as for potential future casinos.

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