Victory for online gambling in Kentucky lawsuit

A major victory for 141 online casino domain owners was struck today in Kentucky, after a three-judge appeals panel ruled that online gambling and casino domains are not gambling devices. The 2-1 ruling by the panel left the Franklin County Circuit Court without jurisdiction in the lawsuit. To remind our readers, the Commonwealth of Kentucky sued 141 online gambling websites for illegally allowing residents of the state to gamble online and asked the state to seize all 141 gambling domains, unless they stopped allowing KY residents to gamble. Franklin County Circuit Court judge granted the domain names to the state on the basis that the casino domain names could be considered gambling devices, effectively giving the state the right to seize them. According to estimates by the attorneys for the state, over 13,000 Kentucky residents gamble at online casinos.

"It 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. We are thus convinced that the trial court clearly erred in concluding that the domain names can be construed to be gambling devices subject to forfeiture," read part of Judge Michelle Keller's majority opinion. The panel also ruled that the circuit courts cannot decide in the future if the state can seize online gambling domains, adding that this kind of hearing should be left to the General Assembly.

Spokesman for the KY Governor said that they were aware of the decision made by the appellate panel on the online gambling domains, but at this time they have not decided what step they will take next. It's also unclear what would happen to the few online gambling domains already taken over by the Commonwealth of Kentucky, nor the actions that will be taken by the online casino and gambling websites named in the 141 domain lawsuit. Many of those online gambling websites have already stopped allowing KY residents to visit their sites, some of them going as far as blocking IP addresses from states neighboring Kentucky, as well.

Published on 01/21/2009