Kentucky Government Appeals Domain Decision to State Supreme Court

The Commonwealth of Kentucky has already appealed Tuesday's decision voiding its attempt to seize 141 Internet gambling domain names.

A four-month dispute between Steven Beshear, the governor of Kentucky, and the owners of the domain names came to a brief halt on Tuesday as two out of three judges at the Kentucky Court of Appeals ruled that a domain name is not a gambling device.

And while it had 30 days to do so, the commonwealth on Wednesday afternoon filed a notice of appeal with the Kentucky Supreme Court asking it to overturn the lower court's decree.

“The Commonwealth will continue its action to protect Kentucky citizens from illegal Internet gambling operations, and appeal the recent Court of Appeals ruling to the state Supreme Court," J. Michael Brown, secretary of the Kentucky Justice and Public Safety Cabinet, said in a prepared statement on Wednesday.

"The evidence demonstrated that illegal and unregulated activity is occurring in Kentucky, and that millions of dollars are being lost as a result of that activity, a fact that wasn’t disputed in Tuesday’s ruling. We now have two judges who agree with our position, and two who disagree, so the most appropriate step is to make our case to the higher court,” the statement said.

But Patrick T. O'Brien, an attorney with Greenberg Traurig in Fort Lauderdale, Fla., disagrees with the commonwealth's assessment.

"The dissenting judge did not necessarily agree with the commonwealth," Mr. O'Brien told IGamingNews in an e-mail Wednesday. "He disagreed with the other appellate judges who held that domain names were gambling devices. He did not address the other issues."

For now, the domain names remain untouchable.

Mr. O'Brien -- who along with William E. Johnson, an attorney with Johnson, True & Guarnieri in Frankfort, Ky., represented clients including PlayersOnly.com and SportsBook.com -- said that, in the near term, the situation will remain status quo because once a notice of appeal is filed, all action is frozen pending the outcome of appeal.

If the Kentucky Supreme Court reverses the appeals court's order, the case would most likely go back to the appeals court, not the circuit court, because the appeals court already ruled that a domain name was not a gambling device, Mr. O'Brien said. Therefore, the appeals court would be tasked with addressing other issues not ruled on previously.

Jon L. Fleischaker, the Kentucky-based counsel for the Interactive Media Entertainment and Gambling Association, told IGamingNews Wednesday that he is not worried about taking this case to the state Supreme Court.

"I think we'll get a good decision by the Supreme Court and that will be helpful for my clients for a variety of reasons," he said.

Click here to view a copy of the notice of appeal.