Dozens of Internet gambling sites have 30 days to block Kentucky users or their domain names will be transferred to the state, a Franklin Circuit judge ruled Thursday in a case with potential international ramifications.
Judge Thomas Wingate denied a motion by Internet gambling Web sites, Internet poker players and online trade associations to stop the state from taking over the domain names of 141 online gambling sites.
That means the seizure by the state of the domains with such names as wildjack.com and worldwidevegas.com will proceed.
Wingate said he was not impressed with arguments that disruption of international Internet commerce by a Kentucky judge will create undue havoc.
"The Internet, with all its benefits and advantages to modern day commerce and life, is still not above the law," Wingate wrote in a 44-page opinion.
William Johnson, a Frankfort lawyer who represents some of the online gambling sites that the state wants to seize, said Thursday it was too early to say whether the sites will appeal Wingate's decision.
But other Internet business groups certainly hope so. Wingate's decision seems to be contrary to other courts' interpretations of Internet commerce, those groups said Thursday.
The decision throws a "wild card into state and international law," said Jeremiah Johnson, president of the Internet Commerce Association, a trade organization that monitors online commerce and issues that affect domains.
The Internet Commerce Association filed a brief in the Kentucky suit supporting the gaming Web site's motion to have the case dismissed.
In his order, Wingate concurred with state lawyers who said that a domain itself is a gaming device. Johnson countered that when Kentucky's gaming statutes were written, there was no Internet and there were no domains.
"If you want to go after internet gambling, then go over to the business behind the domain," Johnson said.
Gov. Steve Beshear said he was "very pleased" that Wingate "validated our concern that there is illegal and unregulated Internet gambling in Kentucky."
"No one has been willing to step up and do anything about illegal Internet gambling until now," Beshear said in a statement. "We must protect our people, especially our children, from this illegal and unregulated activity while also protecting our legal and regulated forms of gaming in Kentucky."
Justice and Public Safety Cabinet Secretary J. Michael Brown said the state decided to take on the online gambling industry because it was illegal and it drained money away from Kentucky's legitimate gambling — including horse racing, the lottery and charitable gaming.
Wingate had issued an order on Sept. 18 transferring the domain names of 141 gambling sites to the state, saying there was probable cause to believe that those sites were illegal gambling sites.
Attorneys for various Internet gambling associations as well as attorneys representing those 141 Web sites filed a flurry of motions after the Sept. 18 order to stop the state's take over of the domain names.
Attorneys for the Internet gambling sites had argued that the forfeiture of the sites should be dismissed in part because the court had no jurisdiction over Internet gambling. They also argued that a domain name was not, in fact, a gambling device.
Wingate, in his order, said gambling Web sites that block Kentucky users from accessing their site within 30 days of his order will no longer have their domain names transferred to Kentucky. Brown said the state had heard earlier this month that some sites had blocked Kentucky users but then later heard that wasn't true.
"We heard that some sites had directed people to another Web site," Brown said.
Wingate also ordered attorneys who represent gambling Web sites to tell the court who their clients are. Attorneys for Kentucky had argued that those lawyers had no standing to argue their case on behalf of their clients because the Commonwealth of Kentucky did not know who was behind many of the Web sites in question. Many online gambling operations are incorporated in foreign countries.
Johnson said Thursday that disclosing the ownership of the Web sites was just one of many things attorneys representing the gambling sites would have to discuss.
Wingate set a Nov. 17 hearing in the case.