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Kentucky Tests State's Reach Against Online Gambling
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On Tuesday, dozens of trade groups, domain registrars and gambling advocates had an opportunity to tell Judge Wingate why the case should be dismissed outright.
One of those at the hearing was Michael Collins, executive director of the Internet Commerce Association, a trade group representing domain name investors and online advertisers. Collins said entire prospect of using the Internet -- not only for commerce but for free speech -- is at risk if one government or state decides they can freely seize domain names.
"What's to keep Iran or China from doing the same thing? Yet, even China - which tries very hard to control the Internet its citizens use - hasn't tried to do what Kentucky is trying to do here," Collins said.
Collins said that while the judge appeared to listen attentively to statements from those defending the online casinos, attorneys for the state presented the registrar certificates from GoDaddy as evidence that the court does indeed have jurisdiction to seize the casino domains.
Wingate is expected to decide within seven days whether to dismiss the case or allow it to proceed to a forfeiture hearing.
John Levine, author of "The Internet for Dummies" and co-founder of the Domain Assurance Council, a non-profit industry consortium, said the case is likely either to be thrown out or reversed on appeal.
"The state's legal arguments fail on so many levels that it's truly bizarre that the court didn't reject this case in the first place," Levine said.
A federal law passed in 2006 makes it illegal for U.S. financial institutions to process payments for online gambling sites. But the law did nothing to prohibit U.S. citizens from gambling at online casinos. Only one state - Washington - has passed a law that bars residents from placing bets online.
Critics of the federal law say U.S. citizens who wish to gamble online can easily find ways around the payment restrictions. For example, in a transcript of the oral arguments that Kentucky's lawyers made to the judge, investigators describe how they were able to gamble at various online casinos using a gift card issued by Visa.
