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Kentucky appeals court blocks seizure of online gambling domains20 January 2009
In a 2-1 decision, the Kentucky Court of Appeals ruled Tuesday that the state could not seize 141 online gambling domains because domain names are not gambling devices under Kentucky law.
The ruling overturns an October decision made by Franklin County Circuit Judge Thomas Wingate that asserted online gambling domains could be seized by the state because online gambling domains constituted illegal gambling devices that were prohibited by Kentucky law.
Among the sites targeted by Kentucky were PokerStars, Full Tilt Poker, Absolute Poker, Bodog and Slotocash.
Late Wednesday, J. Michael Brown, the secretary of the Kentucky Justice and Public Safety Cabinet, announced Kentucky would appeal Tuesday's decision.
"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," Brown said. "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."
While Kentucky officials were promising an appeal, the online gambling industry was celebrating a rare legal victory.
"This is a tremendous victory for Internet freedom and the rights of Kentucky residents who enjoy playing online poker," said John Pappas, executive director of the Poker Players Alliance, in response to the decision. "We are pleased that the appeals court has forcefully reversed Judge Wingate's earlier ruling and confirmed many of the arguments that have been raised in opposition to the seizure effort."
Judge Michelle Keller, writing for the majority, indicated Tuesday's ruling hinged on "whether domain names fall within the statutory definition" of Kentucky law.
"It stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute a 'machine or any mechanical or other device…designed and manufactured primarily for use in connection with gambling,'" Keller wrote.
"We are thus convinced that the trial court clearly erred in concluding that the domain names can be construed to be gambling devices subject to forfeiture," Keller added.
The court also ruled that various Internet gambling trade associations had standing to argue before the court.
Judge Jeff Taylor joined Keller in the majority decision while Judge Michael Caperton dissented.
In his dissent, Caperton argued that the Court needed to take a more expansive view of the definition of an online gambling device.
"The Internet gambling domains serve as addresses which enable the local computer to locate and communicate with the remote computer," Caperton said. "While we see a name on the computer screen, the computer 'sees' a string of numbers. The 'string of numbers' is a necessary component' of the Internet gambling device because without these numbers, the link between the computers could not be initiated and/or maintained. Just as a wire placed into a computer becomes part of the computer, so do the Internet domain names that link remote computers for purposes of gambling become part of the gambling device."
Kentucky appeals court blocks seizure of online gambling domains is republished from Online.CasinoCity.com.
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