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Here is the latest info surrounding this case, gentlemen.
Net gaming sites appeal domain name seizures
By Beth Musgrave - bmusgrave@herald-leader.com
FRANKFORT — Internet gambling companies and online commerce groups want the state Court of Appeals to toss the state's lawsuit that resulted in the seizure of 141 online gambling Web site domain names by the state.
The companies also want the court to stop a Nov. 17 forfeiture hearing in the Internet gambling case, which has attracted national and international attention.
The appeals, filed in the past two weeks, say Franklin Circuit Court Judge Thomas Wingate had no standing to order the seizure of the domain names and that Kentucky has no jurisdiction over international companies — many of which are organized in foreign countries.
The state, in an effort to clamp down on the betting businesses that officials say drain money from the state's legitimate gambling interests, filed legal action against the sites in August. Wingate ordered the seizure of 141 domain names by Kentucky and later set the November date for further forfeiture proceedings.
William Johnson, a Frankfort lawyer who represents some of the online gambling sites, said this week that at least three different groups — representing online companies or online commerce groups — have appealed Wingate's decision to the state Court of Appeals. It's likely that those appeals will be consolidated, Johnson said.
The state has not filed a response to the appeals but still has time to do so.
Jay Blanton, a spokesman for Gov. Steve Beshear, said the state will proceed with the lawsuit and plans to file a response to the appeals despite state revenue projections that show a potential $294 million shortfall. To argue its case, the state is using private law firms, but they are paid only if they win, Blanton said.
"Our primary focus is protecting Kentuckians and Kentucky families from these illegal predators," said Blanton.
Wingate had ruled that the gambling Web sites' domain names — for example, sportsbook.com, — were actual gambling devices. The domain name is nothing more than a name, the online gambling sites argue. Kentucky statutes give the state authority to seize only actual gambling devices.
Wingate ordered the seizure of the 141 domain names after a hearing at which the owners of the Web sites were not present. The case, filed by Secretary Michael Brown of the Justice and Public Safety Cabinet, was sealed. Their due-process rights were violated, the Internet groups argue.
A state Court of Appeals hearing has not been set.
SBR Founder Join Date: 8/10/2005
Here is the latest info on this case:
Court of appeals hears gambling Web site case
By BRETT BARROUQUERE
Kentucky authorities want to seize 140 Internet domain names, saying the web sites bring illegal gambling within the borders of the commonwealth.
Attorneys for a trade association for the gambling web sites countered that Kentucky lacks the authority to make that move because the domain names aren't property and, besides, they are based offshore and beyond Kentucky's jurisdiction.
A three-judge appeals court panel in Kentucky is now weighing whether a state can seized a web site domain name to curtail gambling within its borders, even if it means cutting the rest of the world off from the site.
The question arose after Franklin County Circuit Court Judge Thomas Wingate ruled in October that the state's lawsuit seeking to block Kentuckians' access to more than 140 online casinos could go forward. Wingate also ruled that he planned to hold a hearing about whether the state could seize the web sites.
The hearing has not been held pending the outcome of the appeal heard Friday.
The state sued the web sites after determining that they allowed Kentuckians to gamble illegally and asked a judge to either force the sites to block Kentucky users or allow the state to take possession of the domain names. Kentucky already allows gambling on horse racing and bingo and has a state lottery.
Attorneys for the state and the web sites estimated that about 13,000 people in Kentucky use the online casinos.
William Johnson, who represents five of the web sites, said Kentucky's laws do not spell out that the state can seize domain names. Because lawmakers haven't acted since the law was written in 1974, the state lacks the authority to seize the web sites and shut them down, Johnson said.
"If they had wanted to correct this law, they could have done so annually," Johnson said. "That is a matter for the legislature to decide."
Attorney Jon L. Fleischaker, who represents Interactive Media Entertainment and Gaming Association, Inc., an online gambling trade association, said that by trying to seize the web sites, Kentucky was aiming to apply a criminal penalty to a civil proceeding.
"What they have done is turn the law on its head," Fleischaker said. "If they want to bring a criminal case, they should bring a criminal case."
Eric Lycan, who represented the Kentucky Justice Cabinet, referred to the online gambling sites as a "massive, global, offshore criminal enterprise" whose owners know they are violating the laws of nearly every state in the country by fostering gambling via the Internet.
More than 80 percent of the revenue generated by the web sites comes from the United States, giving any state willing to try jurisdiction over the sites, Lycan said.
"They are doing this because they don't think anyone can catch them," Lycan said.
Judge Michelle Keller asked Lycan why the state doesn't handle the illegal gambling the same way it handles illegal drug transactions -- by making both the sale, purchase and use of the drugs against the law.
"It's illegal to sell the drugs and it is also illegal to use the drug," Keller said. "I don't see much of a difference here."
Lycan said the decision to only criminalize the offering of gambling was a decision made by lawmakers.
"The legislature specifically exempted the player from the legislation," Lycan said.
SBR Founder Join Date: 8/10/2005
SBR Founder Join Date: 8/10/2005
Looks like the Kentucky appeals court rules in favor of online gambling roughly an hour ago.![]()
SBR Founder Join Date: 8/10/2005
Here are the details surrounding this ruling:
Online gambling sites win this round
FRANKFORT — Kentucky, a haven for gamblers who want to bet on horse racing, has hit a setback in its efforts to stop unregulated online casino gambling.
In a 2-1 ruling Tuesday, the Kentucky Court of Appeals said the state does not have the jurisdiction to seize 141 online casinos' Internet domain names in an effort to keep them from operating in the state.
The ruling also said a Franklin Circuit Court judge cannot hold further hearings on the issue.
"This is a tremendous victory for Internet freedom and the rights of Kentucky residents who enjoy playing online poker," said John Pappas, executive director of the Poker Players Alliance, in a statement.
It has been estimated that about 13,000 Kentuckians play the online casinos.
Jay Blanton, a spokesman for Gov. Steve Beshear, said the state did not receive the ruling until late Tuesday.
"We want to take some time to review it. No decision has yet been made on whether to appeal it to the state Supreme Court," Blanton said.
The appellate court ruling said Kentucky lacks jurisdiction to block online gambling because state law does not define an Internet domain name as a gambling device subject to state authority.
"Regardless of our view as to the advisability of regulating or criminalizing Internet gambling sites, the General Assembly has not seen fit to amend (state law) so as to bring domain names within the definition of gambling devices," the court said.
In an unprecedented move last year, state Justice and Public Safety Cabinet Michael Brown, with Beshear's blessing, sued the Web sites. The state contended that the Web sites amounted to illegal gambling.
Franklin Circuit Judge Thomas Wingate agreed in November to allow the state to seize the domain names.
Rich Muny, Kentucky state director for the Poker Players Alliance, said he hopes Beshear and Brown "will abandon this misguided effort and focus new energies into regulation and taxation of Internet poker."
"Rather than spending hard-to-find dollars on this case, the governor could actually turn this into a much-needed new revenue stream for the commonwealth," Muny said.
The Interactive Gaming Council, a trade association for the international interactive gambling industry, applauded the state appellate court ruling. Many of the 141 domain names the state tried to seize are members of the group.
"This is a very important decision for anyone doing business on the Internet," said Jeff Ifrah, counsel for the Interactive Gaming Council.
Beshear campaigned in 2007 to expand gambling in the state by opening casinos, but he contended that some of the most popular online gambling sites are bad for the state.
He has said they create ways for children to gamble, undermine horse racing by creating untaxed competition, make it easier to launder money and lack protections to ensure that people actually receive their winnings.
SBR Founder Join Date: 8/10/2005
That is correct. I posted this story on Mysbr blog earlier today, which you can read here sir.
SBR Founder Join Date: 8/10/2005