Kentucky Tests State’s Reach Against Online Gambling

The Washington Post provides a good outline of the attempt by the state of Kentucky to seize more than 140 online gambling domain names. The article says the case is raising novel legal questions about the physical location of digital property and the reach of local and regional governments on the global Internet. … Attorneys for the state convinced Judge Thomas Wingate that the gambling domain names were tangible “gambling devices” that could be seized under Kentucky’s gaming statutes. Wingate’s order compels the entities that manage the registration of those domains, known as domain registrars, to transfer control over the Web sites to the state.Opponents of the decisions say the Kentucky has no legal authority to seize the casino Web site names, as neither the individuals who registered the Web sites nor the registrars themselves are physically located there. All of the online casinos are operated outside of the United States. Many online gaming companies are lobbying on Capitol Hill to be legalized, regulated and taxed in the United States, which would allow them to market to U.S. consumers.Bret Fausett told the Washington Post Kentucky’s gaming regulations were written long before the advent of the commercial Internet, and make no mention of virtual casinos. While different registrars have taken different positions in regards to the court order. ENom have handed domain names registered with them over to the state government, while Go Daddy, noting the casino site owners have not had a chance to put their side of the story, have said they will wait to act until there is a final adjudication.Michael Collins of the Internet Commerce Association told the Washington Post the entire prospect of using the Internet — not only for commerce but for free speech — is at risk if one government or state decides they can freely seize domain names. And John Levine said the case is likely either to be thrown out or reversed on appeal.To read this Washington Post article in full, see www.washingtonpost.com/wp-dyn/content/article/2008/10/08/AR2008100802870.html