At 11:00am ET today, lawyers for a contingent representing the owners of 141 internet gambling domain names took to the floor of the Kentucky Supreme Court to stave off forfeiture by the Commonwealth. The case, which first broke about one year ago, threatens to make the URLs of online poker sites like PokerStars and Ultimate Bet completely inaccessible worldwide. Six of the seven judges that comprise the Kentucky Supreme Court heard the case during the 90-minute session and the judicial body is expected to rule within the next four months.
Commonwealth attorney Eric Lycan was first to take the stand, arguing that a domain name is subject to seizure on the grounds that it constitutes a “gambling device” because “It’s a name with value and that’s what determines that it’s property.” The term generally refers to tangible objects like dice and roulette wheels that you’d find in an illegal underground casino. Lycan noted that due process was properly followed in the case, explaining, “There will be a due process forfeiture hearing. What we did was take the additional step of going to a court and getting an order before we notified the registrars.” He then made a lengthy comparison to a drug cartel.After labeling the Interactive Media Entertainment and Gaming Association (iMEGA) and Interactive Gaming Council (IGC) “illegal gambling trade associations,” Lycan claimed that the domain names, if successfully forfeited to the Commonwealth, would be put up for public auction. Sites like Full Tilt Poker made contingency plans shortly after hearing that their domains were in jeopardy by acquiring similar URLs like FullTilt.com. When asked if that would mean new action against future domain name permutations, Lycan commented, “The Commonwealth would be well within its rights to do so if it continues to violate the laws of the Commonwealth.”
Given that the “gambling devices” statute is antiquated, Lycan revealed that the legislature meant for it to be interpreted broadly: “It’s necessary to understand that the direction of the law and case law directs that we interpret the word ‘device’ broadly. It is a 30 year-old statute that is designed to stop unregulated gambling. I don’t agree that the internet makes it legal to break the law in Kentucky when they couldn’t do it right here on the street corner.” Lycan’s testimony ran for a half-hour, double the scheduled time, with justices repeatedly posing questions.
As you can see, key points of contention during Thursday’s hearing where whether the Commonwealth had jurisdiction to act, whether domain names constitute “gambling devices” under Kentucky state law, and whether due process was violated. The two parties were also at odds over whether iMEGA and company had standing. Bill Johnson, who represents Sportsbook.com, claimed, “We have the right to defend any lawsuit filed in this Commonwealth. The domain names are named as defendants in the legal proceedings. That’s why we came into the action, because these defendants had not been given any notice of the lawsuit or of the seizure.” Johnson pointed out that the Kentucky legislature has had plenty of opportunities to update its regulations on online gaming, but has failed to do so.
iMEGA attorney Jon Fleischaker then took the stand. The liveliest lawyer of the four that spoke, Fleischaker called combining civil forfeiture with a criminal charge of illegal gambling “unheard of” and “wrong.” After noting that citizens of Kentucky placing bets is explicitly legal and expounding that the State violated due process by hosting a “secret proceeding,” Fleischaker summed up his arguments: “It boggles the mind to look at what the Commonwealth has done.”
The last attorney to take the stand was John Tate, who represents VicsBingo.com and the IGC. Tate argued that the 14th Amendment to the United States Constitution was violated. Tate then charged that Kentucky officials had to use a search engine to find VicsBingo.com, but skirted around the question of whether the 141 internet gambling domain names continue to do business within the Commonwealth’s borders. In response, Lycan, in his closing arguments, remarked that the defendants “have 13,000 poker-only players in Kentucky. It insults the intelligence of the court to say that there is no one gambling. They are doing business here, make no mistake about it.”Rich TheEngineer Muny, the Kentucky State Director for the Poker Players Alliance (PPA), expected a ruling to be handed down within 60 days. iMEGA Chairman Joe Brennan gave an over/under of March, 2010. We’ll have reaction for you to the Kentucky internet gambling squabble right here on PocketFives.com.
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