Friday, October 17, 2008

Kentucky Court Says Gambling Sites Must Restrict Access 

So I forgot to mention the latest in the battle of Kentucky versus online gambling sites.


Kentucky Court Says Gambling Sites Must Restrict Access

In a compromise ruling, a judge in Kentucky said Thursday that he intends to dismiss proceedings against online gambling sites, but only if they deploy technology to prevent state residents from accessing the sites. Otherwise, he ruled, the domain names will be subject to permanent forfeiture.

Judge Thomas Wingate of Franklin Circuit last month issued an order seizing the domain names of 141 out-of-state online gambling companies, which were characterized by Governor Steve Beshear as a threat to Kentucky's "signature industry" of horse racing. The state's Justice and Public Safety Cabinet had earlier filed a motion asking to confiscate domain names of 141 sites, including AbsolutePoker.com, PokerStars.com and UltimateBet.com.

Placing online bets is not illegal in Kentucky, but promoting gambling is a crime in the state. Lawyers for gaming organizations argue that the law banning the promotion of gambling violates First Amendment freedom of speech guarantees.

Industry groups including the Interactive Gaming Council and the Interactive Media Entertainment and Gaming Association also argued that the court had no jurisdiction over the domain names, all of which were operated by companies outside Kentucky. They also argued that it was unconstitutional for Kentucky to curb interstate online gambling operations in order to protect an enterprise in its own state. In addition, they said, Kentucky's forfeiture law only applies to physical gambling devices like roulette wheels, and not domain names.

Wingate rejected all of those arguments, but also held that if the sites prevented Kentucky residents from accessing them, he would relinquish jurisdiction. But one potential problem with that order is that geotargeting isn't 100% accurate, because IP addresses don't always reflect users' true locations.

Wingate adjourned the matter to Nov. 17, but the gaming organizations might file an appeal before that date.

Ed Leyden, president of the Interactive Media Entertainment and Gaming Association, said the group intended to appeal as soon as possible. "The likelihood is we're going to be fighting this tooth-and-nail immediately," said Leyden, who argued the case on behalf of the group. "There were very, very substantial due process violations here."

A spokesperson for Beshear said the governor's office was still reviewing the 44-page decision.

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