*** Internet Gambling Domain Name Seizures Blocked by Kentucky Appeals Court
source - Thomas Jensen
The online gambling news website Gambling911.com broke news earlier
today that the Kentucky Appeals Court ruled on behalf of online trade
association iMEGA against the forfeiture action of 141 internet
gambling domain names sought by Gov. Stephen Beshear to protect the
state of Kentucky's gambling industry from online gambling websites.
The Kentucky Court of Appeals issued a ruling today prohibiting the
seizure of 141 Internet domain names by the state.
In a 2-to-1 majority opinion, the court ruled for the Interactive
Media Entertainment and Gaming Association (iMEGA) in its suit against
Judge Thomas D. Wingate (No. 2008-CA-002000-OA), by blocking the
seizure orders issued by the Franklin (KY) circuit court judge for the
domain names, all related to Internet gambling (Commonwealth of
Kentucky, Franklin Circuit Court, Division II, 08-CI-1409).
Judge Michelle M. Keller, in her majority opinion, found that
Internet domain names for online gambling Web sites were not illegal
"gambling devices" by Kentucky law, as had been claimed by attorneys
representing the Commonwealth, in their attempt to seize control of
the names from their owners. Judge Keller stated that while the
Kentucky legislature could have chosen to include Internet domain
names in its gambling devices law, it had not, therefore the
Commonwealth could not rightfully proceed with its forfeiture action.
"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," Judge Keller wrote. "We are thus
convinced that the trial court clearly erred in concluding that the
domain names can be construed to be gambling devices."
Judge Jeff S. Taylor, also writing for the majority, added that the
Commonwealth could not seek a civil forfeiture based on a criminal
statute when there had been no criminal proceeding. Since there had
been no criminal proceeding or conviction against any of the Internet
domain name owners, the Commonwealth could not take control of their
property.
Judge Micheal Caperton, in his dissenting opinion, wrote that the
Internet domain names were one part of a larger mechanism for
gambling, which included computers and Internet service, and thus, in
his opinion, met the definition of a "gambling device" under Kentucky
law.
"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."
Fleischaker had argued in a December 12, 2008 hear before the Court of
Appeals that the Internet domain names were no more than "billboards"
for the Web sites, and not mechanisms for gambling. Fleischaker had
also argued that the Commonwealth's attorneys could not try to fashion
a civil law remedy with a criminal statue to justify the seizure of
the domain names.
"We are very happy with the court's ruling today," said Joe Brennan
Jr., chairman of iMEGA, an Internet trade association in Washington,
DC. "The judges clearly agreed with our interpretation of the law,
and thankfully, this reverses what would have been a terrible
precedent for our country and the Internet."
The Court in its decision declined to review additional arguments
submitted by the Interactive Gaming Council (IGC) and attorneys
representing Sportsbook.com, also seeking to have the domain name
seizures blocked.
The Interactive Media Entertainment & Gaming Association (iMEGA) is a
not-for-profit corporation headquartered in Washington DC. iMEGA was
founded in 2007 as an association dedicated to the continued growth
and innovation of the Internet. iMEGA seeks constructive engagement
with government at the Federal and State levels to ensure the
challenges of this nascent medium are addressed with the full
participation of people and companies that have built the Internet
into a powerful influence on society.