By Kevin Felix | October 24, 2009

On Thursday the Kentucky Supreme Court heard arguments in a potentially landmark case that could determine the future of online poker as well as set new standards and precedents regarding the censorship of the internet. The Supreme Court hearing marks the latest legal stop in a year-long debate on whether or not the Commonwealth of Kentucky has the jurisdiction to seize gambling-related domain names that are accessible to residents of the state.

Kentucky Governor Steve Beshear gave the order to seize 141 gambling-related domain names in fall of 2008, claiming that they were “gambling devices” and, as such, violated an anti-gambling statute that has been on the state’s legal books since 1974. The initial ruling by District Court Judge Thomas Wingate agreed with Beshear that the web sites were gambling devices and upheld the state’s actions. Several gaming groups including the Interactive Gaming Council (IGC) and the Interactive Media Entertainment and Gaming Association (iMEGA) appealed the case and organizations like the Poker Players Alliance (PPA) and the American Civil Liberties Union (ACLU) also submitted written briefs to the court decrying Wingate’s decision.

The Court of Appeals ruled in favor of the online gambling sites, but the battle did not end there as the Kentucky Supreme Court agreed to hear the case. Thursday’s proceedings included arguments from Commonwealth attorney Eric Lycan, attorney Bill Johnson, who spoke on behalf of several online sports betting groups, iMEGA attorney Jon Fleischaker and IGC council John Tate. The proceedings also included a series of questions from the six Supreme Court judges hearing the case.

Lycan argued that iMEGA and IGC did not even have standing to act on the seizure in the first place since they were not the actual owners of the sites whose domain names are in jeopardy. He also emphasized that there was precedence to seize intangible property like a URL and that they did indeed qualify as a gambling device. During the Court of Appeals case, the three circuit panel disagreed with the State’s assertion that URL’s are gambling devices in the same way a blackjack table or slot machine is, which might explain why Lycan placed so much emphasis on this point during his Supreme Court argument.

In addition to reiterating their belief that URL’s do not constitute gambling devices, the respective attorneys speaking on behalf of the online gambling industry also emphasized the lack of due process in the proceedings, as the initial hearing with Judge Wingate did not allow for the opposition to be heard. Tate argued that the state’s actions violated the 14th Amendment of the Constitution and the Commonwealth has no jurisdiction to take this sort of legal action.

It could take up to a couple of months for the court to issue their written decision. Should the court rule in favor of the Commonwealth, any domain names that do not block Kentucky residents from accessing their sites will be required to forfeit the URL to the state. During his argument, Lycan revealed that those domain names would be sold at public auction once they were under the state’s control.

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