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Emily D. Swoboda
 

'Something Does not Ring Right' in Kentucky, Lawyer Says

23 September 2008

The Commonwealth of Kentucky has already begun seizing the domain names of over 140 gambling Web sites it wants to block from its residents, but one lawyer says there may be a fundamental flaw in the state's case.

"The court doesn't -- and neither do the lawyers -- seem to appreciate the nature of what a domain name actually is," John W. Dozier Jr., an Internet lawyer and managing partner at Dozier Internet Law P.C. in Glen Allen, Va., told IGamingNews by telephone Tuesday. "They are referencing the domain name as if it's property."

Last week, a Franklin County, Ky., circuit court judge ordered the transfer of 141 domain names belonging to online gambling sites to the Commonwealth of Kentucky. The order came in response to a suit filed by the state's Justice and Public Safety Cabinet seeking to "block access to Kentucky citizens, or relinquish control of their domain names."

The order requires domain-name registrars like Network Solutions of Virginia to shut down the sites, which include -- to name a few -- bodoglife.com, cakepoker.com, doylesroom.com, fulltiltpoker.com, pokerstars.com and microgaming.com.

The problem with the court order, according to Mr. Dozier, is that it calls into question whether domain names are considered property, from a legal standpoint.

"It's the same concept as seizing the cars and property of drug dealers," Mr. Dozier explained. "There are special statutes that allow for the seizure of property that relates to criminal mischief."

A 2000 Virginia Supreme Court decision involving Network Solutions decreed domain names are not property; rather, they are a form of a contract right and, therefore, not subject to seizure.

However, other courts have found just the opposite, Mr. Dozier said.

The case also raises the question of whether domain names are a category of property that can be seized as instrumentality of a criminal enterprise, Mr. Dozier said.

"It sounds like, to me, that there is an active criminal investigation," he added. "A lot of these gambling prosecutions have come out of state actions, not federal. And it's not a pretty scene when people start getting arrested and indicted without knowing it and picked up on an airplane when they're going someplace."

A hearing is set for Thursday at the district court in Frankfort, Ky., to determine whether any party has asserted rights as an owner of the seized "property" and whether or not the party qualifies for a return of property.

And Mr. Dozier said that as of now, most of the registrars may not move the domain name into the ownership of the Commonwealth.

"Each will, in all likelihood, put a hold on the domain names so that they can still resolve to the gambling sites, but they (the domain names) are in a state in which they cannot be transferred away from the existing owner," he said.

However, the court may confirm the order on Thursday and require the registrars to transfer the domain names to the Commonwealth of Kentucky.

"But I don't think that would be a very equitable result here," Mr. Dozier said. "Something does not ring right here about this remedy. To be able to say that these are all illegal gambling sites that can be accessed in Kentucky. My guess is that's not necessarily a given, that there may be some of these sites that are operating within the bounds of lawfulness and they are just losing one of the most important assets of their companies with virtually no due process."

Once the Web sites are shut down they will not be accessible anywhere in the world. But the operators could very well relaunch their sites tomorrow under new domain names, much like the Bodog Entertainment Group debacle with Scott W. Lewis, the oft-maligned California patent holder and chief executive of 1st Technology.

Bodog last year lost all of its domain names in a patent dispute, but came back online virtually overnight with all new U.R.L.s.

"If they're (the operators) smart they have a whole stable of domain names," Mr. Dozier said. "However, any company would be foolish to resolve to another domain name until it has its hands around what is going on in Kentucky."

Click here to view the Order of Seizure of Domain Names.

'Something Does not Ring Right' in Kentucky, Lawyer Says is republished from iGamingNews.com.
Emily D. Swoboda
Emily D. Swoboda