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Wednesday, January 21, 2009

Law - Even more on "Kentucky Tests State's Reach Against Online Gambling"

Updating this ILB entry from Dec. 13th, which began with this quote from the Lexington Herald-Leader:

LOUISVILLE — Lawyers representing online gambling interests told the Kentucky Court of Appeals on Friday that Gov. Steve Beshear’s effort to seize domain names is blatantly unconstitutional. A three-judge panel is weighing Beshear’s unprecedented move to seize the domain names of 141 gambling Web sites.
Today Tom Loftus of the Louisville Courier Journal reports:
FRANKFORT, Ky. -- The Kentucky Court of Appeals yesterday struck down a lower court order that would have allowed Gov. Steve Beshear's administration to take control of 141 illegal gambling Web sites.

The administration filed suit in Franklin Circuit Court in September against the 141 Internet domain names. The suit contended that Kentucky law allows the state to seize devices -- in this case the domain names -- used in illegal gambling.

Beshear has said the sites are "leeches on our communities" that take money from Kentucky's horse-racing industry.

Franklin Circuit Judge Thomas Wingate allowed the seizure, but the appeals court stayed that order until it could rule on the matter.

And yesterday, in a 2-1 decision, an appeals court panel disagreed with Wingate, holding that the domain names are not gambling devices as defined by Kentucky law.

"Regardless of our view as to the advisability of regulating or criminalizing Internet gambling sites, the General Assembly has not seen fit to amend (Kentucky law) as to bring domain names within the definition of gambling devices," Judge Michelle Keller wrote.

Judge Jeff Taylor concurred in a separate opinion, while Judge Michael Caperton wrote a dissenting opinion. * * *

Frankfort attorney William Johnson, who represents some of the 141 domain names, said, "We're pleased because the main opinion is right down the line with our arguments that the court didn't have jurisdiction because … Internet names are not gambling devices."

Johnson said he expects the administration to appeal to the Kentucky Supreme Court.

Here is the Herald-Leader story, reported by Jack Brammer. Some quotes:

FRANKFORT — Kentucky, a haven for gamblers who want to bet on horse racing, has hit a setback in its efforts to stop unregulated online casino gambling.

In a 2-1 ruling Tuesday, the Kentucky Court of Appeals said the state does not have the jurisdiction to seize 141 online casinos' Internet domain names in an effort to keep them from operating in the state.

The ruling also said a Franklin Circuit Court judge cannot hold further hearings on the issue.

"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, in a statement. * * *

The appellate court ruling said Kentucky lacks jurisdiction to block online gambling because state law does not define an Internet domain name as a gambling device subject to state authority.

"Regardless of our view as to the advisability of regulating or criminalizing Internet gambling sites, the General Assembly has not seen fit to amend (state law) so as to bring domain names within the definition of gambling devices," the court said.

In an unprecedented move last year, state Justice and Public Safety Cabinet Michael Brown, with Beshear's blessing, sued the Web sites. The state contended that the Web sites amounted to illegal gambling.

Here, thanks to Michael Stevens' Kentucky Law Blog, is a copy of the 16-page "Order Granting Petition for Writ of Prohibition."

And here are earlier ILB entries on this suit.

Posted by Marcia Oddi on January 21, 2009 08:06 AM
Posted to General Law Related