On Tuesday, the internet gambling industry emerged victorious in a case involving the seizure and possible forfeiture of 141 of its most notable domain names. The Kentucky Court of Appeals ruled in favor of online poker sites such as PokerStars, Full Tilt Poker, and UltimateBet, which could have potentially seen their websites inaccessible not only in the Commonwealth of Kentucky, but also around the world. One day later, the Kentucky Justice and Public Safety Cabinet appealed the decision and the case may now head to the Kentucky Supreme Court. A Notice of Appeal was officially filed on Wednesday. The industry, while celebrating this victory, now awaits the next step in the legal process.
The 16 page appeal to the Kentucky Supreme Court pits Justice and Public Safety Cabinet Secretary J. Michael Brown and lower court Judge Thomas Wingate against the Interactive Media Entertainment and Gaming Association (iMEGA), the Interactive Gaming Council (IGC), and lawyers for several of the sites at risk. In October, Judge Wingate ruled that the State had jurisdiction to seize 141 of the world’s largest internet gambling domain names on the grounds that they were “gambling devices” similar to physical items such as slot machines and chips that you’d find in an underground casino. Judge Wingate scheduled a final forfeiture hearing, which prompted iMEGA and the IGC to act prior to an official appeal. The organizations officially filed a Writ of Prohibition, which was granted by the Kentucky Court of Appeals.
The American Civil Liberties Union (ACLU) filed an amicus brief in the case, as did the Poker Players Alliance (PPA), Electronic Frontier Foundation, Network Solutions, and the Center for Democracy and Technology. The ACLU warned the Court of the potential First Amendment violations that occurred. Bill Sharp, who works with the ACLU of Kentucky and appears on this week’s edition of the PocketFives.com Podcast, told us, “While the ACLU of Kentucky respects the Commonwealth's decision to appeal, we are confident that the well-reasoned decision issued by the Court of Appeals will be upheld by the Kentucky Supreme Court. Moreover, we look forward to the prospect of providing the Kentucky Supreme Court with our analysis of why Kentucky's attempted seizure of the 141 domain names violates the Constitution.”
The PPA also weighed in on the news that the Commonwealth of Kentucky had elected to appeal. John Pappas, Executive Director of the one million member strong organization, stated in a press release, “Unfortunately, the Governor and the hired-gun attorneys want to drag their ultimate defeat to another venue at the expense of internet freedom and the rights of law-abiding Kentucky poker players.” The PPA also questioned the need for the State to continue to spend “scarce resources” to prosecute internet gambling. TwinSpires.com, which is owned by Louisville-based Churchill Downs Incorporated, accepts online wagers on horse racing. The site is not among the 141 domain names, leaving some questioning Beshear’s true motives. In addition, the Kentucky Lottery offers an online second chance drawing for non-winning scratch off tickets.
The decision for the Court of Appeals to intervene was based on whether Kentucky had jurisdiction to act in the case and if “great injustice and irreparable injury will result if the petition is not granted.” In the case of websites such as AbsolutePoker.com and BodogLife.com, for example, the domain names would be inaccessible by any online poker player around the world. Although an appeal may have resulted in the rights to the domain being returned, players and sites would have already sought alternative means. The domain names stretched far beyond online poker and also included online casinos, sports books, and Bingo sites. In its decision, the three judge Court of Appeals panel determined that the State did not have jurisdiction to act. Therefore, “No showing of irreparable harm is required.”
Regarding online poker specifically, Judge Wingate ruled that the fall of the cards ultimately determines the winner in a hand of poker. Therefore, it is not a game of skill. The PPA attempted to refute that point in an amicus brief which outlined that poker took a considerable amount of expertise in order to be mastered. In a recent ruling in Pennsylvania, a judge ruled poker is a game of skill by citing industry literature as well as an extensive mathematical analysis. In an article that appeared in the “Ville Voice” on Wednesday in Louisville, the author (“rick”) commented, “Beshear’s little folly in the courts surely cost taxpayers money. He never proved that citizens playing poker online was a significant problem or that grabbing a share of the pot would have made money for the state anyway.” Across the river from Kentucky is the Horseshoe Casino, which hosts a World Series of Poker Circuit Event. The 2008 installment’s Championship Event was won by Samuel Oberlin.
No timeline on whether the case will be heard by the Kentucky Supreme Court has been given. The Court of Appeals ultimately ruled in favor of the internet gambling industry by a two to one margin.
The New Year has already been a busy one for the online poker world. Keep up to date on all of the latest developments in the Poker Legislation Forum on PocketFives.com. Check out the PocketFives.com Podcast featuring ACLU spokesperson Bill Sharp.
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