While millions of dollars are wagered each spring on the annual Kentucky Derby triple crown horse race, the state is generating headlines this week for a gambling issue that is a little different. Kentucky’s Supreme Court is hearing arguments on a case involving Internet domain names that are involved in online gambling.
Can state seize domain names?
The judges are hearing arguments that are tied to an old “gambling devices” statute in Kentucky. The issue involves over 100 domain names. The state of Kentucky has argued that these names are no different than any gambling devices, like slot machines, and can be seized. “They have been using these to violate the law in Kentucky,” Eric Lycan, an attorney representing the Kentucky Justice Cabinet, said. “They are subject to forfeiture.”
An initial ruling by a Franklin Circuit Court judge went in the favor of the state. The administration wanted to seize 141 gambling domain names in an attempt to prevent the citizens of Kentucky from gambling on the internet. The state has felt that online gambling has hurt Kentucky’s noted horse racing industry. The decision was then overturned by the Kentucky Court of Appeals to land the case in the state’s Supreme Court.
The state wanted a judge to force the sites to block Kentucky residents from using them or to be allowed to seize the domain names.
Web gambling groups make their case
Three attorneys from internet gambling groups delivered their objections to the proposed legislation to the Kentucky Supreme Court. Their arguments are tied to the lack of a specific law in the state that prohibits online gambling. Attorney Bill Johnson feels that Kentucky has improperly mixed civil and criminal issues in the case.
click here to see most Popular Pages“The ultimate issue in this case is whether a domain name is a gambling device under the statute,” Johnson told the court. “This case should have never proceeded in the beginning.”
Kentucky Supreme Court Justice Lisabeth Abramson questioned Lycan on domain names and if they could be viewed as gambling devices because the original law was enacted before online gambling began. The statute in question referred to devices like roulette wheels and poker tables.
“Aren’t you just trying to use a 30-year-old statute that talks about tangible property to get to Internet gambling?” she asked.
Lycan feels that the law should be broadly interpreted as the state clearly intended to ban casino-style gambling in Kentucky.
Another issue involves the jurisdiction of the state of Kentucky. Most of the domain names are for offshore gambling sites. So, the state is trying to gain control of entities that aren’t based in the United States. Industry attorneys have also argued that the law violates the international trade agreements and First Amendment to the U.S. Constitution.
There has been another basic question that has been raised in the case. If the domain names are able to be seized, there is nothing preventing the gambling companies from coming up with new ones. A ruling isn’t expected for at least several weeks.
