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Kentucky judge OKs 141-site net casino land grab

'The internet is not above the law'

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A Kentucky judge has upheld that state's seizure of some of the world's most popular online casino domain names, ruling they constitute a "gambling device" that is subject to Kentucky's anti-gambling laws.

Last week's ruling by Franklin County Circuit Judge Thomas Wingate applies to absolutepoker.com, ultimatebet.com, and 139 other domain names accused of illegally offering gambling opportunities to Kentucky residents. Wingate said he had legal standing to seize ownership of the domain names even though few if any of the owners are located in the state, an element the opponents argued was necessary for the seizure to be upheld.

"We note that opposing groups and lawyers argue any judicial interference of the internet will create havoc," Wingate wrote in his October 16 ruling (PDF). "The internet, with all its benefits and advantages to modern day commerce and life, is still not above the law, whether on an international or municipal level."

The 43-page decision upholds a previous ruling Wingate issued in secret ordering domain name registrars to transfer ownership of 141 internet addresses to Kentucky officials. The state's Justice and Public Safety Cabinet filed its complaint under seal and obtained the ruling before the casinos had an opportunity to argue against the motion.

In a September 26 court hearing, lawyers representing the domain name owners argued Wingate's order should be overturned. Among other things, they said the court lacked jurisdiction over the forfeiture of domain names because they are rights granted in a service contract rather than property that is owned. They also argued that because the domain names weren't physically located in Kentucky, Wingate's court did not have authority to seize them.

Wingate shot those arguments down.

The domain names "perform a critical role in creating and maintaining connection by way of the various interfaces to transact a game or play," he wrote. "Accordingly, but subject to further review during the forfeiture hearing, the court finds reasonable bases to conclude that the internet gambling operators and their property, the internet domain names, are present in Kentucky."

He went on to write that the domain names "are virtual keys for entering and creating virtual casinos from the desktop of a resident in Kentucky. The domain name is indispensable in maintaining the player's continuing access to the virtual casinos which serve as the internet gambling operators premises for conducting illegal gambling activity."

The dispute is the latest example of the difficulty of regulating activity on the internet, a medium that in many ways breaks down geographical boundaries. If decisions like Wingate's are allowed to propagate, any site on the once freewheeling internet could be subject to the laws of the most world's most restrictive states.

Wingate said he was inclined to lift the seizure of Goldenpalace.com because the website is limited to ads for third-party gambling websites. Wingate also amended his earlier seizure order to exempt any online casino that uses geographic filtering to block Kentucky residents from using the services. Those that do not will be ordered to forfeit their domain names. Oral arguments on the forfeiture are scheduled for November 17. ®

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