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Computers, Security, Media, Communications, Internet

Kentucky Threatens to Forfeit Gambling Domains


Supporters of online gambling on Friday lashed out at a Kentucky circuit court ruling ordering owners of 141 domain names to appear at a hearing next month to demonstrate that they are blocking Kentucky traffic to their sites.

 

If the owners of well-known domains such as Sportsbook.com, Goldenpalace.com, Playersonly.com, and 138 others do not appear or cannot prove that they block Kentucky gambling traffic, their domains will be forfeited to the state.

 

The ongoing case of the Commonwealth of Kentucky versus 141 Internet domain names is the latest legal or legislative battleground in a heated war between those seeking to ban online gambling and those who support it.

 

Ground zero in that war has shifted back and forth from the federal government to the twin island nation of Antigua and Barbuda to the World Trade Organization and back to the federal government and now to the state of Kentucky.

 

Kentucky Gov. Steve Beshear, a Democrat, is leading the state’s effort to block online gambling sites. State residents spend an estimated $170 million there annually. But the state is also trying to protect its own gambling operations, including betting on horse racing and bingo.

 

Gov. Beshear cheered the ruling made Thursday by Judge Thomas Wingate to proceed with legal action against the 141 domain owners.

 

But the case is challenging. States have problems establishing jurisdiction in cases involving the Internet. Kentucky will have an additional problem with whether forfeiture of a domain will indeed be effective in shutting down Internet businesses.

 

“A prohibition on online gambling is doomed to fail,” said Michael Waxman, a spokesman for the Safe and Secure Internet Gambling Initiative. “There are virtually an unlimited number of web site addresses available to online operators, and circumvention will continue unless regulated alternatives are provided.”

 

Another problem for the state is that many of the laws referenced in the prosecution of Internet gambling cases predate the Internet or don’t directly address the Internet.

 

“The judge even reached back to law that was revoked more than 30 years ago to shoehorn the definition of domain names into a co-called definition of gambling ‘devices,’” according to a note from Joe Brennan Jr., chairman of iMEGA, an association of Internet gambling firms.

 

Attorneys for the online gambling defendants argue that domains are not property subject to forfeiture. They are just combinations of letters and numbers that serve as mnemonic aids establishing rights in a service contract.

 

“This is an attempt by one governor to respond to the fact that online gambling is flourishing in an underground market place so a solution to the problem is needed countrywide, and we believe that solution lies in regulation,” Mr. Waxman said.