Kentucky Internet Gambling Case Rebound

There has been plenty of debate about banning gambling but the key issue in the now famous Kentucky case is rather different. Whether it’s legal or illegal to involve in gambling is another matter. The Commonwealth seized the domain names (141 of them!) under Governor Steve Beshear, questioning the legality of the gambling devices being used. Besides, it’s been demanded that the owners of the site should appear in court.

The seizure and forfeiture occurred in 2008 leading to immediate reaction from Interactive Media Entertainment and Gaming Association (iMega) and Interactive Gaming Council (IGC) on behalf of domain name owners. They hired lawyers to fight against the seizure, asserting it as illegal and lacking due procedures. What’s noteworthy is that the sites which risk seizure are famous giants in the gambling industry such as Absolute Pokers, Bodog, PokerStars, Ultimate Bet and Full Tilt Poker.

Judge Wingate’s Verdict

The case was held at first in the circuit trial court of Judge Thomas Wingate. In October he passed on a verdict that upheld the Commonwealth’s seizure attempt on the grounds that it did not mean crippling the freedom of the internet.

However, the verdict received intense reactions. It was alleged that Beshear was trying to seize the domains with the purpose of protecting horse racing. It is said that the Kentucky racetracks faced financial problems in past several years. As such Beshear thought that domain seizures would block Kentucky residents from accessing online gambling sites. He also wanted to take advantage of the Kentucky Lottery. Both horse racing and lottery have flourished to such an extent that the lottery business generated $744 million during 2007.

iMEGA and company then sought the involvement of the Kentucky Court of Appeals in Louisville.

Supreme Court Verdict

In March 2010, the Supreme Court asserted that the argument lacked a strong party with a standing. It held that right from the beginning, there was no such party which appeared at the trial court or the Kentucky Court of Appeals.

In response to this observation iMEGA and IGC tendered affidavits from Yatahay Limited and Pocket Kings. iMEGA and IGC asserted that Yatahay owned the doman name Truepoker.com and Pocket Kings owned Full Tilt Poker.

However these filings were made at the Kentucky Court of Appeals, which were then sent back to the Supreme Court. The Court stated that no party had appeared when the case was held at first instance. So the trial court needs to first pass judgment on the standing and jurisdiction. The Supreme Court was however doubtful about whether the names of the owners mentioned in the affidavits did in fact own the concerned domain names. Consequently the case was referred back to the Kentucky Court of Appeals. It is said that the iMega has 20 days to re-file with the Kentucky Court of Appeals. It is speculated that the case will probably make its way back soon to the state Supreme Court.

The Debate

Apart from the debate whether online gambling is legal or illegal, the fact remains that Kentucky permits online wagering on horse racing and online lottery. But in the case of online casino gambling and poker, it gets a partial treatment. However the most important development in this regard is that this case is a real wake up call for those website owners who have got away through such court sojourns anonymously. The Supreme Court’s verdict that the owners have to appear before court if they wish to strengthen their domain name and save from seizure has changed the course drastically. The results of course, would be far reaching and helpful, making them responsible enough to avoid fake gambling tactics, fooling gamblers into losing their money.