January 21, 2009 (The Associated Press) — The Associated Press's Joe Biesk has filed the following story about the Kentucky ruling:
Kentucky may not seize 141 online casinos' Internet domain names in an attempt to block them from operating within the state's borders, a three-judge appeals panel ruled.
In a 2-1 opinion Tuesday, the Kentucky Court of Appeals panel said an Internet domain name is not a gambling device. That left the Franklin County Circuit Court without jurisdiction in the matter.
"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,'" Judge Michelle Keller wrote in the majority opinion. "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."
The state sued the Web sites after determining that they allowed Kentuckians to gamble illegally and asked a judge to either force the sites to block Kentucky users or allow the state to take possession of the domain names. Kentucky already allows gambling on horse racing and bingo and has a state lottery.
Attorneys for the state and the Web sites have estimated that about 13,000 people in Kentucky use the online casinos.
Gov. Steve Beshear spokeswoman Jill Midkiff said officials had received the ruling late Tuesday, were still studying it and had not decided what the state's next step would be.
The appellate panel also ruled the circuit court cannot hold a hearing on whether Kentucky may seize the domain names. Keller's opinion said it's up to the General Assembly — not the courts nor the state Justice Cabinet — to bring domain names into the definition of illegal gambling devices.
Jeremiah Johnston, president of the Washington D.C.-based Internet Commerce Association, said he was pleased by the ruling. Still, Johnston said the court did not address whether the state had the authority to involve itself in seizing domain names of internationally based companies.
"That wild card is still out there," Johnston said. "In the end, it's a positive ruling, so we'll take it."