Kentucky officials will appeal a Court of Appeals decision to stop Commonwealth attorneys from attempting to seize 141 Internet domains related to gambling and poker.
The Court of Appeals sided with lawyers representing the Interactive Gaming Council (IGC) and the Interactive Media Entertainment and Gaming Association (iMEGA) — two trade groups representing dozens of the sites — as well as the sites themselves. The panel of three judges voted 2-1 in favor of the poker groups, a ruling that was made public Jan. 20. The judges heard oral arguments from both sides in December.
"We’re not surprised that Gov. Beshear and Secretary (J. Michael) Brown filed their appeal,” said Joe Brennan Jr., iMEGA’s chairman. “They both invested a lot of political capital in this suit. They likely feel they can’t back down.”
Kentucky is trying to use a section of its anti-gambling law that allows it to seize devices that are used to facilitate unlawful gambling. It claims in this case that the domain names are the devices.
In September, Judge Thomas Wingate signed a seizure order that was pushed forward by Gov. Steve Beshear. He claims the unregulated online gambling and poker industry is dangerous to children and also undermines one of Kentucky’s biggest interests: horse racing, which can be wagered on from anywhere in the state via telephone and computer.
Kentucky is trying to use this seizure order to not only force the companies out of it borders but also for some serious money. Kentucky wants the sites to pay collectively around $1 billion for lost revenue and lawyer fees.
Not so coincidently, the attorneys representing Kentucky in this case are from private firms and took the case on a contingency basis. They will only be paid if this legal maneuver goes off.
After the seizure was signed, Wingate told the sites that they could get off the hook easily by “geoblocking” Kentucky’s residents, which would prevent them from accessing the sites listed on the order. Kentucky attorneys were attempting to appeal this portion of the judge’s ruling before the Court of Appeals ruled.
Several sites decided to go this route, including Tokwiro, which owns Absolute Poker and UltimateBet, and MicroGaming, which owns dozens of poker rooms. But the others entered an appeal process fronted by iMEGA and the IGC.
The motion to appeal the Court of Appeals ruling was filed last week.