By
P5s Staff |
Published
Jan 27 2009, 09:31 PM
Two critical events in the Kentucky internet gambling case occurred last week, sending the online poker industry buzzing. On Tuesday, the Kentucky Court of Appeals sided with the Interactive Media Entertainment and Gaming Association (iMEGA) and the Interactive Gaming Council (IGC) in a case involving the seizure and potential forfeiture of 141 domain names, including those belonging to PokerStars and Full Tilt Poker. On Wednesday, the Commonwealth of Kentucky struck back, appealing the ruling to the state’s Supreme Court. This week, the PocketFives.com Podcast welcomes Jeff Ifrah, Lead Attorney for the IGC, to discuss his reaction to last week’s big news.
For those PocketFivers who aren’t familiar with the case, here’s an overview. Late last year, it was revealed that Kentucky Governor Steve Beshear ordered the seizure of 141 of the world’s largest internet gambling domain names, claiming they were “gambling devices.” The affected companies included online casinos, sports books, Bingo sites, and poker rooms. In October, a Circuit Court judge, Thomas Wingate, upheld the actions of the Governor. The IGC and iMEGA were quick to respond, filing a writ of prohibition to the state’s Court of Appeals to intervene. The hearing occurred in Louisville, Kentucky in December. Last Tuesday, a three judge Court of Appeals panel ruled by a two to one margin that the lower court’s decision should be overturned.
Ifrah told the PocketFives.com Podcast why the Court of Appeals sided with the IGC: “A domain name is not a mechanical device. That was the first flaw. In order to have jurisdiction over the domain names, [Kentucky’s] contingency fee lawyers needed to demonstrate that they are property located in Kentucky. In many ways, we believe that the case was ill-conceived from the get go.” Slot machines, chips, dice, and other physical items you’d find in an underground casino are traditionally associated with “gambling devices.” Moreover, games of chance are considered illegal in Kentucky. If poker were proven to be a game of skill, then online poker rooms would likely be exempt.
On his reaction to the Court of Appeals siding with the internet gambling industry, Ifrah recalled, “We were very humbled and gratified by the decision. A domain name is not a mechanical device and that there is no law in Kentucky that provides for the civil forfeiture of a domain name. The two judges who were in the majority agreed on at least two bases.” Michelle Keller, Jeff Taylor, and Michael Caperton served as the three judge Court of Appeals panel. The former two ruled in the majority and Judge Caperton submitted the only dissenting opinion.
It took exactly one day for the Commonwealth of Kentucky to announce that it would appeal the decision to the state’s Supreme Court. Ifrah commented, “I was hopeful given the strength of the Court of Appeals decision that the contingency fee lawyers would give up and the Secretary and Governor would move on. There had been indications that this was no longer of significant interest to the Secretary and Governor and, in light of the economic situation, the Governor was going to move on.” The Secretary in question is J. Michael Brown, who heads the Justice and Public Safety Cabinet. The government agency is heading up Kentucky’s position in the case.
Now, the industry awaits word on whether the Kentucky Supreme Court will take the case. The Commonwealth has 30 days to file its brief. In the meantime, Ifrah is confident of the IGC’s stance: “The contingency fee lawyers appealing, digging in their heels, and clinging to a belief that the Supreme Court isn’t going to notice these multiple deficiencies is very unrealistic.” When the Commonwealth files its brief to the Kentucky Supreme Court, the IGC and iMEGA will do the same. The Poker Players Alliance (PPA) and American Civil Liberties Union (ACLU), among other groups, have filed amicus briefs in the case. They may once again do so if the Supreme Court hears it.
On the global implications of the Kentucky Court of Appeals ruling, Ifrah noted, “The decision [appears to be] limited to the state of Kentucky. The Court of Appeals was careful to reject the case, but reject it on the basis that it was limited to a statute that only exists in Kentucky.”
Check out the rest of this week’s PocketFives.com Podcast Podcast featuring IGC Lead Attorney Jeff Ifrah. We’ll also feature an update from iMEGA Chairman Joe Brennan.