Kentucky judge upholds seizure order of 141 online gambling domains

[The Buzz]

Judge Thomas Wingate in Kentucky has upheld the seizure order of 141 online gambling sites, and he's given them 30 days to implement measures that would block Kentucky residents from accessing them. Here's the link to the ruling. Vinism should have a story on this soon.

https://www.gpwa.org/news/Kentucky.v...et.Domains.pdf

[thepokerkeep]

Unf***ng real !!!

[TheGooner]

real heading should be something like.

Kentucky Judge demonstrates that he's out of his depth and not fit to sit in judgement of the case ...

"just what are these intertubes things all about anyway ?"

[vinism]

Here's our first story on the matter. I'm also working on a wonky legal analysis piece that I'll post sometime tomorrow.

Kentucky judge gives online gambling sites 30 days to block access

16 October 2008
By Vin Narayanan

Judge Thomas Wingate has given 141 online gambling sites 30 days to block access to Kentucky residents. If the sites in question -- which include industry giants Full Tilt Poker, PokerStars, Bodog and Golden Palace – have "reasonably established to the satisfaction of the Kentucky's Justice and Safety Cabinet or this Court that such geographical blocks are operational, (they) shall be relieved from the effects of the Seizure order and from any further proceedings in the instant civil forfeiture action," said Wingate in his 43-page ruling.


The exact nature of the verification process remained unclear in the immediate aftermath of the decision. "We're still going through the ruling," said Jennifer Brislin, communications director for the Justice and Public Safety Cabinet, which filed the lawsuit on behalf of the government. "If all these sites block access (to Kentucky residents), they'll be free from forfeiture. Otherwise, there will be a forfeiture hearing (on Nov. 17)."

"I don't know what the procedure for verification will be yet," Brislin added. "It will be more involved than a 'Hey, we blocked you' notification."

Sites that don't block access from Kentucky will have an opportunity to present their case before Wingate on Nov. 17 at 10:30 a.m. In his ruling, Wingate indicated one line of defense he would be willing to hear is the Web sites are simply advertisements.

"The counsel for Goldenpalace.com represented during the October 7 hearing that the operation of Goldenpalce.com is limited to maintaining a website and providing advertisement for third-party gambling websites," Wingate said in his ruling.

"The court agrees that the maintenance of a website or Internet advertisement alone, without more, is not enough to constitute presence for the purposes of state court jurisdictional analysis…Thus, the Court recognizes that as to any of the Defendants 141 Domain Names that identifies websites which are providing information only, the Seizure Order must be appropriately rescinded and will be rescinded in due course," Wingate added.

"The appropriate time to make that determination, i.e., whether the operations of the website identified with the domain name goldenpalace.com, however, is not in this proceeding, but during the forfeiture hearing (on Nov. 17).

The rest of Wingate's ruling Thursday focused mostly on whether Kentucky had jurisdiction over domain names, arguments that domain names were not illegal gambling devices and standing.

And his decision that Kentucky did indeed have the jurisdiction to seize domain names to enforce gambling laws didn't come as a surprise to those following the case.

"A state court will almost always try to find jurisdiction," explained Buffalo State business law professor Joe Kelly.

The online gambling sites have four options available to them, Kelly added. They can comply with Wingate's ruling, appeal Wingate's ruling, proceed with the forfeiture hearing or try and challenge Kentucky in federal court on interstate commerce issues.

"This (interstate commerce) really should be brought up in a federal court," Kelly said. "They stand a much better chance arguing this in a federal court than I think in a state court."

Wingate's ruling was immediately condemned by the Poker Player's Alliance, which filed an amicus brief arguing that poker sites should not be included in the state's action because poker is a skill game.

"Clearly, we believe the judge in this case got it wrong," said John Pappas, executive director of the PPA. "First of all, we strongly disagree with Judge Wingate's ruling that poker is not a game of skill. As demonstrated in the amicus brief we filed, skill plays an essential role in being a successful poker player. Additionally, we believe that by confirming Governor Beshear's actions, the court has set a dangerous precedent for censorship of the Internet. Today's ruling is a big step backward for both personal rights and Internet freedom."

"Judge Wingate's order is a huge disappointment to the thousands of Kentuckians who play Internet poker. In essence, Governor Beshear and Judge Wingate are denying law-abiding citizens this form of recreation simply because it is enjoyed on the Internet. This is Internet censorship by judicial fiat, plain and simple," added Rich Muny, Kentucky State Director of the Poker Players Alliance.

"I am certain that many of the plaintiffs in this case intend to quickly appeal this matter. We are confident that the Kentucky Appellate Court will review the facts and overturn today's order. At the same time, the PPA will continue its efforts to protect the rights of Kentucky citizens to play poker online," Pappas added.

[The Buzz]

Here's some local media coverage of the decision ...

http://www.kentucky.com/news/state/story/558669.html

[thepokerkeep]

"No one has been willing to step up and do anything about illegal Internet gambling until now," Beshear said in a statement. "We must protect our people, especially our children, from this illegal and unregulated activity while also protecting our legal and regulated forms of gaming in Kentucky."

The judge referred several times (in his judgment) to a law that inferred internet gambling was illegal in Kentucky.

I was under the impression that Kentucky had no such law on the books... can someone explain what law they are invoking in this case?

And if there is a law making online gambling illegal in Kentucky, why is the State not on the list of restricted states we all use?

The list I use for my Doyles Room review page...
Illinois, Indiana, Louisiana, Michigan, New Jersey, New York, Nevada, Oregon, South Dakota, Utah, Wisconsin, Washington

[yorktown]

You need to put yourself in the shoes of one of the owners.

A) There's no way you will show up. Doyle Brunson might. Most others, no way.

B) This is Kentucky. I kept referring to this as Boss Hogg in the Dukes of Hazzard. Winning without Federal Intervention is unlikely.

C) You've got 30 days. Bodog didn't have that luxury. Look at what they did. They re-branded to Bodoglife.

So, if you are FullTiltPoker, here's an option: Kiss the domain goodbye. You have 30 days to use another brand (block Kentucky and Louisiana, of course).
-30 days in the internet is a veritable lifetime to rebrand.
You will call/email all your clients and promote your new brand, you will redirect FullTiltPoker so it points to the new brand for the next 30 days.

D) Lets assume the domain is just too important (ex: PartyPoker), where re-branding is highly unlikely. Then, settling with a fine is a better alternative. But as Sting at Gambling911 points out, when will it end? Kentucky's nearby neighbors (Georgia, Texas, Louisiana, etc) are sure to do the same, meaning more settlements and more $.

Those are the options.

As for affiliates and the future, I said this all along.....look at registrars outside the USA. It adds one more hurdle for the state. I have assembled a list of registrars and prices HERE at non-USA Jurisdictions that are ICANN certified.

Marc Lesnick
Conference Organizer
Casino Affiliate Convention

[TheCPA]

I think you all may have missed exactly how the Judge Amended the September order.

Basically he has admitted limited Jurisdiction, but he has ruled that he can retain jurisdiction on the matter in his court as it pertains to Kentucky.

He has removed the requirement for the actual owners to be there, and simply asked that they block Kentucky, show him they did it, and after that he will instruct the Registrars to release the locks on those domains.

Here is the amended order.

The Court’s Seizure Order of September 18, 2008 is herby AMENDED so that any of the Defendants 141 Domain Names, their respective registrants or their agent, or any other person with an interest or a claim who, on or before 30 days from entry of this Opinion and Order, installs the applicable software or device, i.e., geographic blocks, which has the capability to block and deny access to their on-line gambling sites through the use of the Defendants 141 Domain Names from any users or consumers with the territorial boundaries of the Commonwealth, and reasonably establishes to the satisfaction of the Kentucky’s Justice and Safety Cabinet or this Court that such geographical blocks are operational, shall be relieved from the effects of the Seizure Order and from any further proceedings in the instant civil forfeiture action. The Court acknowledges that in ren jurisdiction is not unlimited. Once the domain name is satisfactorily shown as not being used in the Commonwealth for illegal or unlawful gambling, this Court relinquishes jurisdiction.

[yorktown]

...yes......

I did not see the amendment on removing the actual OWNER shows up in court on Nov 17. That is not going to happen.


Golden Palace already appears to be rebranding. Note that goldenpalace.com redirects to goldenpalacenv.com

Like I said, time to rebrand.

Marc Lesnick
Conference Organizer
Casino Affiliate Convention

[TheCPA]

provided the actual OWNER shows up in court on Nov 17.

No Marc. That's not what it says!

any of the Defendants 141 Domain Names, their respective registrants or their agent, or any other person with an interest or a claim

If they named you as their agent, you could go in for them!
This a huge departure from his initial demand the actual owners show up.
No fines are in play if they block Kentucky either, BTW.

[arkyt]

So, if you are FullTiltPoker, here's an option: Kiss the domain goodbye.

Right - every single Internet gaming company on this list and in any list the future should just roll over and play guilty - sure will do a lot for moving this industry forward - NOT!

I am sick of companies doing just that - they have all had plenty of opportunities over the years to stand up and fight for what they feel is right - yet not many have given it a second thought. Instead they roll over and look for loop holes, alternatives to get around unjust restrictions - that type of behavior puts the 'crooked' in all of the inflated propaganda. It's what the uninformed politicians have to go on - it does nothing to change anyones mind - it in fact it does just the opposite.

This case and the judgement are a joke - if all of the companies dicide to comply then the case sets one heck of a precedent.

[yorktown]

Arkyt. I am a proponent of the industry.

But in this case, you are dealing with Boss Hogg and time is your enemy.

Registrars, ICANN and a whole slew of Netziens are now up in arms. Online gaming has many allies now.

I suggested that kissing the domain goodbye and rebranding was an OPTION. GoldenPalace seems to be excercizing that option.

The industry is standing up for itself.

Marc Lesnick
Conference Organizer
CAC2008.com

[vinism]

I was going write a legal analysis piece today, but I decided to put that on hold while I work a different angle on this case (it will take a few days, but hopefully, you'll find the article illuminating). So in lieu of a complete analysis piece, I thought I'd offer some of my thoughts here.

This case touches on a lot of thorny issues, ranging from regulating global commerce to commercial speech, to trade treaties and agreements and the rights of states, nations and economic cooperatives to regulate the Internet. And that's a prickly bush even before you throw gambling into the mix.

The legalities surround these issues are best determined at a federal level. But this case wasn't in federal court. It was in state court. And because in the U.S., gambling has traditionally been regulated at the state level, yesterday's ruling was completely expected and not at all a surprise.

Most state court judges are more worried about protecting state law than they are about setting a bad precedent for interstate and/or global commerce. So not surprisingly, the judge in Kentucky managed to find jurisdiction in this case.

Do I think the judge's ruling was wrong? Absolutely. It's a tremendous reach (and I'm being charitable here) to call domains gambling devices. And calling domains property that are subject to the laws of wherever they might be viewed is downright dangerous. The thought that local jurisdictions around the world could tie up companies (non-gambling and gambling alike) with this type of litigation on a perpetual basis is very scary.

That said, pieces of Wingate's ruling showed some pragmatism that should be appreciated by the online gambling industry. If sites sued by Kentucky "voluntarily" geo-block Kentucky, they're no longer subject to the seizure order. Does complying with this order set a bad precedent? Yes. Does it make sense to comply and protect your asset? Probably.

Wingate also realized that most of the owners of these sites won't step foot in the U.S. And he gave these companies an out. As long as "agents" of the site can demonstrate the blocking works, then domains won't be seized.

In addition, Wingate amended the original complaint filed by Kentucky and removed the damages request. This does a few things. First, there won't be any time consuming haggling over how much each site should pay in damages if online gaming companies comply with the ruling. That makes this an easier pill to swallow for operators. Secondly, the private attorney prosecuting this case on behalf of the state was working on a contingency fee. This ruling effectively kills that lawyer's fee (which I find absolutely hilarious).

So what happens next? I would hope that the various attorneys involved in this case ask for a stay on enforcement (essentially putting a freeze on the ruling) and try to take this case to federal court, or appeal the decision to a higher state court. There are plenty of issues that can be taken up on appeal. And this case is too important to just drop.

[TheCPA]

This order should be appealed for several reasons, however, the domain owners are not in a position NOW where they have to lose control of their domains in the meantime.
This amended order allows for easy compliance, IMO.

As for Golden Palace, they don't operate in the U.S. right now anyway, so this is a no brainer for them.

Actually, it's a no brainer for all of them, IMO.
Block Kentucky to protect your domain, and get over to Federal court and get a ruling from a Federal Judge on seizing domains owned by people from foreign countries without due process.

That would not even have be a gambling related challenge either.

We can't have low level Circuit Judges making these kinds of GLOBAL decisions. It's ridiclous.
This Judge is wrong in retaining jurisdiction on ANY level in this matter, but if he isn't challenged in a higher court NOW, then it's possible others may follow.

Somebody needs to file an action in Federal Court. JMO.

[TheCPA]

Wow, we must have been typing and posting at the same time! LMAO

It appears we pretty much AGREE to a "T" on this one Vin!

So, Like you said,.... I just said,...I Agree with both of us 100%!

[TheCPA]

So what happens next? I would hope that the various attorneys involved in this case ask a stay on enforcement (essentially putting a freeze on the ruling) and try to take this case to federal court, or appeal the decision to a higher state court. There are plenty of issues that can be taken up on appeal. And this case is too important to just drop.

I agree with most of that.
That would be a Supercedes of some sort.

If they appeal to the Superior Court in Kentucky, a Supercedes would work fine I think, however, if they file a new action in Federal court, unrelated specifically to this case, but Domain Seizure in general, there will be nothing to Supercede.

If they file a new action in Federal Court that addresses this case, then a Supercedes might work.

No matter what, someone needs to file an action, but be sure to comply or request additional time if they need it to either comply, or to file a new action.

They could also ask this Judge to "Reconsider" and present him some more case law. He will reconsider, but I doubt he will reverse himself, so best to be ready for "Plan" B!

[vinism]

Wow, we must have been typing and posting at the same time! LMAO

It appears we pretty much AGREE to a "T" on this one Vin!

So, Like you said,.... I just said,...I Agree with both of us 100%!

That's hilarious. When I saw your post, I was like damn, you're fast.

But you are correct. This ruling needs to be challenged. It's just a matter of tactics and will at this point.

[vinism]

I just wanted to call attention to one other legal tidbit that I reported on yesterday. It lays the ground work for what could be a successful argument at the forfeiture hearing.

In his ruling, Wingate indicated one line of defense he would be willing to hear is the Web sites are simply advertisements.

"The counsel for Goldenpalace.com represented during the October 7 hearing that the operation of Goldenpalce.com is limited to maintaining a website and providing advertisement for third-party gambling websites," Wingate said in his ruling.

"The court agrees that the maintenance of a website or Internet advertisement alone, without more, is not enough to constitute presence for the purposes of state court jurisdictional analysis…Thus, the Court recognizes that as to any of the Defendants 141 Domain Names that identifies websites which are providing information only, the Seizure Order must be appropriately rescinded and will be rescinded in due course," Wingate added.

"The appropriate time to make that determination, i.e., whether the operations of the website identified with the domain name goldenpalace.com, however, is not in this proceeding, but during the forfeiture hearing (on Nov. 17).

[yorktown]

US Based registrars need to step up to the plate on this one as well.

Godaddy alone expects to lose millions in revenue alone if this goes through. They would be foolish not to throw their legal hats into the ring.

Marc Lesnick
Conference Organizer
CAC2008

[TheCPA]

I was like damn, you're fast.

My wife was looking over my shoulder, and she said, YEP, you're fast at a lot things, but TYPING isn't one of them!