November 22, 2017

Wingate Postpones Kentucky Hearing

Franklin County Circuit Court Judge Thomas Wingate has postponed a decision on whether ownership of 141 seized domain names will pass to the Commonwealth of Kentucky. The hearing, initially scheduled for 1:30 p.m. today, has been continued until Friday, Sept. 26 at 3:30 p.m.

The hearing concerns a suit Kentucky’s Public Safety Cabinet filed last week, demanding that Internet gambling sites block access to Kentucky residents or forfeit ownership of their URLs. Gov. Steve Beshear announced the suit at a press conference Monday after the state took control of the 141 domain names at Wingate’s order.

According to Jennifer Brislin, communications director for the Justice and Public Safety Cabinet, the 141-site list was “developed by attorneys (conducting the investigation) and are sites where people from Kentucky, using Kentucky addresses, were able to place bets.”

Kentucky has no law explicitly pertaining to online gambling. However, sections of the state’s KRS 528 do ban the illegal use of gambling equipment and impose forfeiture of these devices to the state as punishment. In the suit, Brislin said, the state is classifying the URLs as gambling equipment and maintaining their use is illegal according to the Unlawful Internet Gambling Enforcement Act of 2006.

KRS 528 also makes it illegal to “conduct, promote, advertise, own, profit from or conspire to profit from illegal gambling.”

Although all the sites whose inclusion in the suit had been confirmed Tuesday were U.S.-registered, a full disclosure of Wingate’s seizure order reveals that several are also held by international registrars.

Representatives from the European Union and the Remote Gambling Alliance—both entities that support online gambling—have fired back that the World Trade Organization ruled the UIGEA a violation of international trade agreements. In a case brought before it, the WTO sided with claimants Antigua and the EU awarding them $21 million and $100 billion, respectively, in reparations. Offshore gambling sites that have begun to reenter the U.S. have, therefore, cried foul, noting that the Kentucky suit contradicts a previous international ruling.

What’s more, several experts have noted that the Kentucky does not have legal jurisdiction to seize international sites, but the state’s lawmakers are unperturbed.

“Unlicensed, unregulated, illegal Internet gambling poses a tremendous threat to the citizens of the commonwealth because of its ease, availability and anonymity,” Gov. Beshear said.

“The owners and operators of these 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.”

According to Kentucky Justice Secretary J. Michael Brown, “(The suit) is an unprecedented action in this country to protect… (Kentucky’s horseracing industry) from illicit interests that are attempting to profit at our expense.”

Brown also stated that Kentucky’s suit is a civil—not criminal—action and that State Attorney General Jack Conway’s office will not be called in to prosecute the case. Instead, the law firms Hurt, Crosbie and May from Lexington, Kentucky and Foote, Meyers, Meilke and Flowers from Geneva, Illinois will represent the state when proceedings resume tomorrow.

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