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Emily D. Swoboda

Insights | Bluegrass Blues

25 September 2008

A circuit court order giving the Commonwealth of Kentucky permission to seize 141 online gambling domain names certainly raises a bushel of thorny questions about First Amendment rights, as well as the legality of Internet censorship -- that is, where capital-J-jurisdiction begins and ends.

Whether Kentucky's civil action is part of a larger criminal investigation remains to be seen; regardless, the civil suit has created quite a stir and may have broader implications yet for the Internet.

IGamingNews was curious, therefore, as to whether the Kentucky case could set a dangerous precedent in other states -- or even federally -- for Internet censorship.

Joseph M. Kelly: If a state in this country could get away with doing this type of thing, what would stop a province of Canada, or Australia, or some particular regional body from doing the same thing if they said: "Our citizens are logging on to an entity that has its corporate headquarters in the United States and we're very upset at the violence, which is against our law, or pornography or something else."

I can just see this creating international chaos.

Will it be effective? All it's going to do, I think, would be two things. First of all, a player from Kentucky, I'm sure, could still select one of the other sites. What are there, 2500 sites? So, it won't have any impact on the players. But also the entities who are seized could just make a slight change and go right back online.

But here's my real problem with it. I've always had difficulty where a state could do something that involves interstate commerce. Our federal courts have been very, very tough on any state that tried to regulate the Internet because they said 'you're trying to interfere with interstate commerce.'

May I go off on a slight tangent for a moment?

There's a case coming out of New York federal court where the State of New York tried to ban child pornography on the Internet. This was attacked by the American Libraries Association and some other entities. And the law (ban) was found invalid because the federal judge said regulation of the Internet has to be on the national level at least. So, they never had to get to a free speech issue.

You know what's the oddest is that Kentucky has never had a reputation for going after Internet gambling.

Mr. Kelly is a professor of business law at The State University of New York at Buffalo. He is licensed to practice law in Nevada, Illinois and Wisconsin.

Lawrence G. Walters: This action has the potential to set tremendously adverse precedent for the industry, if any state can simply ask a local judge to forfeit domain names without any notice or opportunity to be heard by the affected domain owners.

We view this as a flagrant violation of due process rights, and the Commonwealth's actions have substantial First Amendment implications as well. Each of these sites were providing constitutionally-protected, commercial speech on the Internet by way of their domain name.

If the domain name is seized, the site can no longer exist; at least in the form it was previously. That kind of governmental action has been consistently been found to be a 'prior restraint' on protected speech, and thus unconstitutional.

Mr. Walters, an attorney specializing in Internet gambling law, is a partner with Weston, Garrou, Walters & Mooney.

I. Nelson Rose: There is always the danger of prosecutors or politicians in other states copying this move. But that does not mean it was legal. I doubt this will stand up in court. But for a while it would be a good idea for operators to not take bets from patrons in Kentucky.

Mr. Rose is a professor at Whittier Law School in Costa Mesa, Calif., who specializes in gambling law. He also serves as a consultant and expert witness for governments and industry.

Insights | Bluegrass Blues is republished from
Emily D. Swoboda
Emily D. Swoboda