Appeals Court Prevents Kentucky’s Seizure of 141 Internet Gaming Domain Names–at Least For the Time Being

by Lou on November 18, 2008

If you look deep enough and long enough, you’re guaranteed to find some good news! The Kentucky Court of Appeals granted a motion to postpone the forfeiture hearing concerning those 141 Internet gambling domain names that Kentucky’s governor, Stephen Beshear, attempted to seize.

The Interactive Media Entertainment & Gaming Association (iMEGA), a Washington DC based Internet trade association, asked for a stay until the appeals court had an opportunity to consider iMEGA’s petition to have the lower court seizure ruling overturned. A hearing on that petition is set for December 12 in Louisville.

“We’re pleased that the Court of Appeals has given us the opportunity to challenge these seizures,” said Joe Brennan Jr., iMEGA’s chairman. “The commonwealth has tried to take these domains for their own financial gain, violating Kentucky law, exceeding their jurisdiction, and setting a terrible precedent in the process.”

IMEGA said that the state’s action was simply an effort to protect the state’s own gambling industry from competition by online gambling sites.

The appeals court also combined iMEGA’s petition with one filed by Interactive Gaming Council (IGC), of Vancouver, B.C., an international online gambling trade group. Both groups contended that the lower court lacked jurisdiction to order the domain seizures.
iMEGA also argues that Kentucky’s actions violate the Commerce Clause of the U.S. Constitution, and Kentucky lacked the authority to initiate the seizure action in the first place.

“This matter has generated concerns across the online world about abuse of governmental power,” said Brennan. “Kentucky is opening the door for any government—state and local, foreign and domestic—to use what amounts to blackmail to achieve its ends. If this precedent is allowed to stand, it’s not hard to imagine a government like China utilizing this kind of seizure power to prevent free media, like the New York Times, from reaching their citizens.”
The next action on this case is scheduled for December, two weeks before Christmas. Stay tuned. I’ll let you know what happens next.

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