The Kentucky Supreme Court has ruled against the owners of 141 internet gambling domain names. The ruling, which was handed down on Thursday morning, asserts that neither the Interactive Media Entertainment and Gaming Association (iMEGA) nor Interactive Gaming Council (IGC) has standing. However, all indications are that iMEGA and company will file the necessary documents to continue to pursue the case within the next 20 days. Read the entire Kentucky Supreme Court decision.Instead of debating whether the 141 internet gambling domain names constituted “gambling devices” under Kentucky state law or whether proper due process was followed, the Kentucky Supreme Court focused squarely on whether iMEGA, the IGC, and counsel for several of the URLs at risk had standing. With the case already heard by the Franklin Circuit Court and Kentucky Court of Appeals, the Kentucky Supreme Court charged, “Although all such arguments may have merit, none can even be considered unless presented by a party with standing. No such party has appeared.”
During the legal proceedings, which have occurred over the past 18 months in the Bluegrass State, iMEGA and the IGC have not divulged their membership ranks. The Kentucky Supreme Court ruling succinctly explains, “iMEGA refuses to reveal which registrants it represents, or even how many. It simply claims to have members who registered some, but not all, of the seized domains.” The sites at risk include the industry behemoths PokerStars and Full Tilt Poker.
The question now becomes what the next steps iMEGA and the IGC would need to take in order to satisfy organizational standing. The decision reads in part, “Without even revealing any of the registrants they purport to represent, the associations cannot hope to achieve associational standing.” iMEGA Chairman Joe Brennan told PocketFives.com that identifying just one of its members may be sufficient to claim standing. The trade organization plans to re-file in the Kentucky Court of Appeals and the case may immediately move back to the state Supreme Court.Brennan remained cautiously optimistic about the organization’s prospects of proving standing. In a press release distributed by iMEGA on Thursday, Brennan commented, “All along, it seemed the Court wanted to go our way and this decision today indicates that is still the case. The Court is telling us that all that is necessary is for one domain owner to come forward and we likely win. We obviously would have preferred a complete, clean victory today, but reading the decision, it seems this is a technicality that is only delaying the inevitable.”
The 14-page decision concludes with the Kentucky Supreme Court instructing the Court of Appeals to dismiss the writ of prohibition, which has so far staved off the forfeiture of the 141 internet gambling domain names. The URLs were seized in September 2008, allegedly without due process, and Circuit Court Judge Thomas Wingate upheld the State’s actions in an October 2008 ruling. In January 2009, the Kentucky Court of Appeals ruled by a two-to-one margin that the State did not have jurisdiction to act since the domains in question were not “gambling devices.” Then, Commonwealth attorneys appealed to the Kentucky Supreme Court.
The state’s highest judicial body heard the case last October. A so-called “group of five” domain names had representation in the Kentucky Supreme Court. However, the Court’s justices ruled that they too lacked standing: “Since no owners or registrants have ever claimed to be participating in this case at any level, the Commonwealth requests that this Court vacate the writ and restore the seizure of the domain names.” Six out of the seven Kentucky Supreme Court Justices (pictured at left) concurred with the ruling.Brennan told PocketFives.com that no additional briefings or oral arguments would be needed for the Kentucky Supreme Court if iMEGA can prove it has standing to sue. The trade organization is based in Washington, D.C. and led the charge to overturn the Unlawful Internet Gambling Enforcement Act (UIGEA) by charging that it was unconstitutional. Ultimately, the Third Circuit Court of Appeals ruled that the legality of internet gambling under the UIGEA may depend on state law.
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