Court tells Kentucky 'no dice' on seizing gambling domain names

Kentucky is just about out of luck in its attempts to leverage its own state legislature and court system for protecting online horse race betting from competition by overseas gambling Web sites.

The Kentucky Court of Appeals decided on Tuesday that the state does not have the authority to seize 141 Internet domain names associated with online gambling.

The state's efforts to block sites that offer poker, sports, and casino-type betting have been widely regarded as actions to further support Kentucky racetracks and Internet horse race betting, a type of online gambling which is expressly permitted under the US government's Unlawful Internet Gambling Enforcement Act.

An earlier trial court ruling authorizing the seizure of the domain names was challenged in the appeals court on constitutional grounds by groups such as the ACLU of Kentucky, the Center for Democracy and Technology (CDT), and the Electronic Frontier Foundation (EFF).

But the appellate court ruled on Tuesday to overturn the earlier judgment based on an interpretation of Kentucky's "gambling device" forfeiture statute.

"Regardless of our view as the advisability of regulating or criminalizing Internet gambling sites, the [Kentucky] General Assembly has not seen fit to...bring domain names within the definition of gambling devices," the court determined on Tuesday.

The appeals court also suggested that the Kentucky legislature might be able to amend the "gambling device" forfeiture statute to cover domain names.

But Matt Zimmerman, a legal analyst for the EFF, contends that the state would probably be unable to seize the domain names even if state statute did get changed.

"In addition to this type of domain name seizure still raising serious First Amendment, due process, and other constitutional problems, Kentucky courts...also lack the authority to directly order out-of-state registrars to turn over customer domain names," Zimmerman wrote in a blog post.

In 2008, Kentucky Justice and Public Safety Cabinet Secretary Michael Brown sued the offshore Web sites suspected of illegal gambling, with the approval of Kentucky Governor Steve Beshear. The domain names were later seized by the state, based on the earlier decision by the Franklin Circuit Court. However, the appeals court then decided that the circuit court did not have jurisdiction to rule in the matter.