Seed
NewsvineLittle over four days ago, a three judge appeals court in Kentucky heard testimonies from two opposite sides of camp regarding the highly publicized domain name seizure ordered by a County Circuit Judge back in October. Potentially serving as a precedent setting verdict, the final word has yet to be made regarding what has turned out to be a very controversial issue not just in Kentucky, but for the online gambling industry as a whole.
For anybody who hasn't been following the case, it all started when Kentucky Governor Steve Beshear solicited the services of a top law firm on a "no win, no pay" basis to bring down online casinos and betting sites that have been taking bets from Kentucky citizens. Bringing forth a lawsuit against some 140 online gambling sites, the State of Kentucky was successful at getting Judge Thomas Wingate to rule in favor of seizing the domain names of these websites as a remedy to stop them from doing business in Kentucky cyberspace, if you will.
Never mind the fact that seizing a domain name would prevent these website from doing business with the rest of the world (where online gambling is legal in many jurisdictions, mind you), Judge Wingate evidently saw Kentucky, where a meager 13,000 people make use of online casinos, as having legal domain over the rest of the world and therefore permitted the lawsuit to go forward. The catch of the lawsuit, however, is that Kentucky will retract their seizure, or at least not exercise the seizure, on betting sites that implement geo-targeting to block Kentucky residents from continuing to place real money wagers.
What essentially amounts to blackmailing also has another catch. Governor Beshear says that he is cracking down on betting sites because they are a threat to both children and the State's horseracing industry (for as we all know, children and horseracing go hand-in-hand). But the part that Governor Beshear isn't so forthcoming about is that the lawsuit seeks approximately $1 billion in recompense for allegedly stealing business from the Kentucky lottery and horserace tracks.
Attorney's representing the gaming sites, as well as trade bodies like the Interactive Media Entertainment and Gaming Association (iMEGA), have been actively fighting the lawsuit. In fact, iMEGA was largely responsible for getting Judge Wingate's ruling to go to appeals court. Their case rests on the condition that nowhere in Kentucky's gaming legislation is their anything that says a domain name can be classified as an illegal gambling device. Furthermore, they counter that Kentucky only wants to criminalize what is only a threat to its own financial gains. Protectionism to the fullest.