The state of Kentucky is taking an aggressive approach to “stop illegal and unregulated online gambling” by seeking a judicial order to seize a number of domain names associated with online gaming sites.

The state won an initial ruling September 22 that gave it the right to seize 141 domain names including GoldenPalace.com, AbsolutePoker.com and PokerStars.com, but on September 27, a judge rejected the order and listened to arguments at an October 8 hearing. All the domain names are owned by European companies that are regulated and legal in their home jurisdictions.

Attorneys fighting the initial ruling laid out a number of questions for Judge Thomas Wingate to address, including:

• Do websites qualify as gambling devices under Kentucky law?

• Does Kentucky law expressly prohibit online gambling?

• Does a state have the power to seize a domain name connected to international commerce, traditionally a matter reserved for the federal government?

• Do the elements of skill preclude poker sites from being considered gambling sites?

• Do the actions of Governor Steve Beshear violate the U.S. Constitution’s due-process provisions?

Following the initial ruling, Beshear’s office released a statement condemning unregulated internet gaming for undermining the state’s horse racing industry, attracting underage gamblers, enabling money laundering schemes and failing to protect consumers.

“Unlicensed, unregulated, illegal internet gambling poses a tremendous threat to the citizens of the commonwealth because of its ease, availability and anonymity,” Beshear said. “The owners and operators of these illegal sites prey on Kentucky citizens, including our youth, and deprive the commonwealth of millions of dollars in revenue. It’s an underworld wrought with scams and schemes.”

Jennifer Brislin, a spokeswoman for Kentucky’s Justice and Safety Cabinet, said the state wants nothing more than to block access to online gaming for its residents. She said there is technology that should allow sites to identify the location from where a player is logging in, and the state wants these sites to use that technology.

“Our goal is not to enforce our laws anywhere else except within the borders of Kentucky,” Brislin said.

A major question is how many registrars will comply with a ruling that upholds the initial decision. The Kahnawake Gaming Commission, which operates a number of the sites named in the seizure order, said it would not.

The Canadian First Nation sent a letter to the governor saying it will not comply with the state.

“This is a perfect example of someone who knows nothing about the effects of their actions,” said Kahnawake Grand Chief Michael Ahrihrhon Delisle, Jr. “It’s not the first time that a government has tried to prevent us from conducting business and it won’t be the last. But, rest assured, we will always protect our jurisdiction and the integrity of the Kahnawake Gaming Commission.”

By GGB Staff

Staff writers for Global Gaming Business magazine. Las Vegas, Nevada.