The Kentucky Supreme Court has agreed to hear an appeal filed by the state’s Justice and Public Safety Cabinet in the case involving the seizure and potential forfeiture of 141 internet gambling domain names, including those belonging to the industry goliaths PokerStars and Full Tilt Poker. Oral arguments are scheduled for 11:00am ET on Thursday, October 22nd. The Interactive Media Entertainment and Gaming Association (iMEGA), which is fresh off a mixed decision in its Unlawful Internet Gambling Enforcement Act (UIGEA) constitutional challenge, is spearheading the case.In January, the Kentucky Court of Appeals ruled by a 2:1 margin that the Commonwealth did not have jurisdiction to seize domain names on the grounds that they were “gambling devices,” a term generally given to tangible objects like a roulette wheel or slot machine that you’d find in an underground casino. The Court stated, “We are thus convinced that the trial court clearly erred in concluding that the domain names can be construed to be gambling devices.” The websites in question were seized in September and an October ruling by Judge Thomas Wingate upheld the Cabinet’s actions.
iMEGA Chairman Joe Brennan told PocketFives.com, “The Commonwealth of Kentucky tried to justify the seizures under the gambling devices statute and the Appeals Court said it didn’t apply. The Governor’s attorneys sought a civil forfeiture remedy based on a criminal accusation. Even though it was a 2:1 decision, their logic got trounced.” Recently, the Third Circuit Court of Appeals ruled that the legality of internet gambling under the UIGEA may ultimately depend on its legality in the state a player is located. Brennan explained, “If Kentucky’s attorneys want to raise the Third Circuit decision, I think they do so at their own peril.”
Judge Michael Caperton submitted the lone dissenting opinion in the Court of Appeals. He concluded, “I believe that internet domains are but one of the components that are unified into an internet gambling device and properly within the definition of device.” In essence, Caperton asserted that a domain name is part of a larger gambling device. Now, the case heads to the state’s Supreme Court, with two judges having ruled in favor of Kentucky’s actions and two siding with the internet gambling industry.
The Commonwealth’s attorneys appealed to the Supreme Court in January one day following the 2:1 Court of Appeals decision. On whether the highest judicial body in Kentucky taking the case stems from Governor Steve Beshear’s support, Brennan speculated, “I think they’ll show him a certain amount of deference being the Chief Executive. This case created a lot of attention for the Commonwealth of Kentucky. Unfortunately, Kentucky came off looking poor.” Brennan noted, “What you see at work is the Governor being a political animal. He has rooted most of his attacks not in the law, but in rhetoric. While he may be impassioned, he ran on a platform of ending corruption and bringing casino gambling to Kentucky.”
Louisville plays host to the annual Kentucky Derby each May. The event brings in millions of dollars in revenue, while the online horse racing site, TwinSpires.com, accepts real money wagering and is owned by Churchill Downs’ parent company. The site takes bets online and over the phone. In addition, the Kentucky Lottery offers a second chance online option on select $5, $10, and $20 tickets. Across the river from the southern state, casinos sprinkle the countryside in Indiana and Illinois in cities like Evansville and Metropolis.
Also involved in iMEGA’s Kentucky case is the Poker Players Alliance (PPA), American Civil Liberties Union (ACLU), the Center for Democracy and Technology, the Electronic Frontier Foundation, the Internet Commerce Association, eBay, and Network Solutions. In Minnesota, iMEGA successfully blocked an action by the Department of Public Safety calling for the censorship of 200 internet gambling sites. Many did not accept United States customers, including Titan Poker and Everest Poker, the latter of which is the official on-felt sponsor of the 2009 World Series of Poker (WSOP).Meanwhile, Brennan has not ruled out the possibility of appealing the Third Circuit’s decision. The three-judge panel disagreed with many of iMEGA’s core arguments, but ultimately stated that the UIGEA does not make internet gambling illegal. Instead, it may be up to each state to decide what is permissible within its borders.
Stay tuned to PocketFives.com for the latest on iMEGA’s Kentucky battle.
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