Kentucky attempts to seize gambling site domains

Gaming industry and Internet commerce groups are balking at the state of Kentucky's attempts to seize 141 Internet domain names for online gambling sites.

Lawyers will descend upon a Frankfort courtroom on Friday for the next phase of the Kentucky takeover, which began with a lawsuit from the state's Justice and Public Safety Cabinet, seeking to force the gambling sites to block access to Kentucky users, or relinquish control of their domains. A district judge on September 18 ordered (PDF) the domain names be transferred to the state after Friday's hearing. Representatives for the sites will have an opportunity at the hearing to object to the transfers.

The state initiated the lawsuit in an effort to stop illegal online gaming. Kentucky is the first state to bring an action against Internet gambling operators resulting in the seizure of domain names, according to a press release from Kentucky Gov. Steve Beshear's office.

"The owners and operators of these illegal sites prey on Kentucky citizens, including our youth, and deprive the Commonwealth of millions of dollars in revenue," Beshear said. "It's an underworld wrought with scams and schemes."

Among other things, the state says online gambling drains the state of money by undermining horse racing, a key tourism industry for the state.

The list of sites affected includes AbsolutePoker.com, Bodoglife.com, and PokerStars.com. A large number of the sites have already been transferred to the state or are now locked from being transferred to anyone else, according to Jennifer Brislin, communications director for the Justice Cabinet. Some sites, such as GoldenCasino.com, have already notified users based in Kentucky they will no longer have access to the site.

"There's a recognition among the industry that this is an action that has been occurring illegally," Brislin said. "Registrars in the United States and foreign countries have been following the court order."

Groups like the Internet Commerce Association have voiced their concern over the state's actions and are skeptical the seizure would stand up to legal scrutiny.

"It appears that there may be no statutory basis for this unprecedented action, that Kentucky may lack sufficient jurisdictional grounds and that it also may violate the Commerce Clause of the U.S. Constitution," ICA President Jeremiah Johnston said in a statement.

The ICA, along with other groups like the Interactive Media Entertainment and Gaming Association, are actively opposed to the court order.

However, Brislin said it is clear the state has jurisdiction to act because the sites it is attempting to take over agreed under the Internet Corporation for Assigned Names and Numbers to refrain from using their respective domain names for illegal purposes.

"Our laws are very specific about what constitutes illegal gaming, and anything that promotes or supports illegal gaming in Kentucky is illegal," she said.