Kentucky State Loses Domain Gambling Seizure Case

The Kentucky Court of Appeals has granted petitions by the Interactive Gaming Council (IGC) Interactive Media Entertainment and Gaming Association, Inc. (iMEGA) to overturn an earlier trial court ruling authorising the seizure of domain names owned by operators of overseas gambling websites says the Electronic Frontier Foundation in a posting on its website.

The EFF report continues:
“While challenged on several additional fronts — including on a wide range of Constitutional grounds by EFF and its fellow amici the ACLU of Kentucky and the Center for Democracy and Technology (CDT) — the Court overturned the prior ruling based on an interpretation of Kentucky’s ‘gambling device’ forfeiture statute:
[I]t stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute a ‘machine or any mechanical or other device … designed and manufactured primarily for use in connection with gambling.’

“The Court of Appeals suggests that the Kentucky legislature might be able to amend the statute (KRS 528.010) to cover domain names, but even if it did, the Commonwealth would likely still be out of luck. In addition to this type of domain name seizure still raising serious First Amendment, due process, and other constitutional problems, Kentucky courts (as pointed out in our joint amicus brief) also lack the authority to directly order out-of-state registrars to turn over customer domain names.”

However, in this case, there have been no criminal charges or indictments filed against any persons or entities involved. I believe for there to be a forfeiture, the clear legislative intent requires a conviction of one of the crimes enumerated in KRS Chapter 528. No other logical interpretation of the ‘violation’ requirement of the KRS 528.100 can be made, given KRS Chapter 528 is a penal statute.

“This is a tremendous victory for Internet freedom and the rights of Kentucky residents who enjoy playing online poker,” said John Pappas, executive director of the Poker Players Alliance.

“This decision confirms why we went the way we did with suit,” said Jon L. Fleischaker, attorney for iMEGA and managing partner at Dinsmore & Shohl in Louisville, KY. “We knew when we brought this to the Court of Appeals, that we would get justice for iMEGA and the domain names in Kentucky.”

However whether the State decides to appeal has not been decided, with Jay Blanton, a spokesman for Gov. Steve Beshear, saying:
“We want to take some time to review it. No decision has yet been made on whether to appeal it to the state Supreme Court.”

The court’s decision, a 2-1 majority decision against the Commonwealth of Kentucky, concludes, saying:
while we see a name on the computer screen, the computer ‘sees’ a string of numbers. The ‘string of numbers’ is a necessary component of the internet gambling device because without these numbers, the link between the computers could not be initiated or maintained. Just a wire place into a computer becomes part of the computer, so do the internet domain names that link remote computes for purposes of gambling becomes part of the gambling device.

Therefore, based on the foregoing analysis, I believe that internet domain names are but one of the components that are unified into an internet gambling device and properly within the definition of device as that term is in KRS 528.100.

It will be interesting to see how this definition stands the test of time in future court cases, and also if this case is appealed to a higher court.

The Electronic Frontier Foundation posting is available from and includes a copy of the court decision.