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Emily D. Swoboda
 

Kentucky Domain Debacle Heating Up

23 October 2008

It's been a busy week in Kentucky, where a battle for 141 I-gaming domain names is heating up. Just today, the court pushed back the forfeiture hearing scheduled for next month, while in recent days the Kentucky Court of Appeals was petitioned by an industry trade association.

Thomas D. Wingate, a circuit court judge for Franklin County, ruled last week that all 141 defendants had until Nov. 17 to show that they have installed technology or software to block access by Kentucky residents. Today, however, Judge Wingate ruled on a motion to stay the forfeiture hearing, extending the date to Dec. 3.

Jeff Ifrah, legal counsel for the Interactive Gaming Council, told IGamingNews by telephone that the motion gives defendants more time either to comply with the order or take other action -- like filing an appeal.

It also gives the Kentucky Court of Appeals time to consider briefings filed by parties who want to file an appeal. The Interactive Media Entertainment and Gaming Association, meanwhile, has already filed a petition asking the appeals court to take over the case.

IMEGA, a trade organization advocating on behalf of its members in the Kentucky case, lost its associational standing as part of last week's ruling. Judge Wingate designated iMEGA and other associations, including the Interactive Gaming Council, "friends of the court," which means they can still enter motions and argue the case, but are no longer considered a party.

Edward J. Leyden, the president of iMEGA, told IGN that, in theory, defendants would have to wait until the end of the proceedings to file an appeal, but since iMEGA's standing was taken away there is some question as to whether or not they would even have the right to appeal.

"So, we're undertaking what's called a petition for a writ of mandamus," said Mr. Leyden, who is also an attorney in Washington, D.C. "We make several different arguments why that should happen, all basically boiling down to two things: one, the circuit court didn't have jurisdiction over this issue; and two, they acted in an unconstitutional manner."

IMEGA argues that Kentucky's government has no jurisdiction to bring this case, principally because domain names are not property. Even if they were property, Mr. Leyden said, they would not be physically based in Kentucky.

"This should have been dismissed," Mr. Leyden said.

Furthermore, Mr. Leyden cautioned that due to both Judge Wingate's formulation of the December hearing and trade associations' lack of standing, some domain-name owners -- Internet gambling companies -- are being compelled to appear in court. If they appear, company representatives would subject themselves to the court's jurisdiction and could risk prosecution and arrest.

"Under the Fifth Amendment, you do not have to subject yourself to prosecution and arrest," Mr. Leyden said.

Representatives with Kentucky's Justice and Public Safety Cabinet -- the entity that initiated the proceedings -- have told IGN that they are not looking to prosecute any of the operators. The cabinet also said its end game is simply to block Kentuckians' access to these Web sites.

In related news, the attorney for GoldenPalace.com, Lawrence G. Walters, has filed a motion for relief from seizure based on something Judge Wingate noted in his order last week.

According to the statement of facts in the order, Judge Wingate agreed with Mr. Walters' First Amendment argument that GoldenPalace.com serves not as a gambling Web site, but as an advertising site for other gambling Web sites and is not, therefore, subject to seizure and forfeiture in this case.

In other words, Mr. Walters argues that GoldenPalace.com does not offer play-for-money services to the United States, but instead acts as an advertiser for third-party sites.

"We elected to bring the GoldenPalace.com issue to the court's attention prior to the forfeiture hearing, so we could get our client out as soon as possible, and it did not appear that this posed any problem for the court," Mr. Walters told IGN by e-mail.

More updates on this case as they develop.

Click here to view GoldenPalace.com’s motion for relief from seizure.

Click here to view iMEGA’s petition for writ of mandamus.

Kentucky Domain Debacle Heating Up is republished from iGamingNews.com.
Emily D. Swoboda
Emily D. Swoboda