Frankfort, KY – Governor Steve Beshear says Internet gambling sites are nothing but leeches on our communities illegally siphoning millions of badly needed dollars from the commonwealth. Beshear says they pay no taxes, aren't regulated by the state and provide no jobs. So, last month, Kentucky seized the domain names of 141 of the gambling sites and refuses to give them back unless the sites block access to Kentuckians. Last week, dozens of lawyers representing the gambling sites showed up in Franklin Circuit Court, seeking the lawsuit's dismissal. They say the court has no jurisdiction because none of the domain names are registered in Kentucky, and the names, as defined by state law, are not illegal gambling devices. But in a 43-page order denying the dismissal motions, Judge Thomas Wingate ruled the domain names are present in Kentucky. The ruling was extremely satisfying to Justice Secretary Michael Brown. He found probable cause that these 141 domain names were involved in illegal gambling activity in the Commonwealth of Kentucky, that the domain names can be viewed as gambling devices and it was appropriate for me, as the agent for the governor, to bring the lawsuit on behalf of the commonwealth.
Judge Wingate will hold a hearing November 17th, to decide if the 141 domain names should be forfeited to the state. But why is the state seeking forfeiture and what will it do with the domain names? Secretary Brown. Forfeiture would enable us to go back to the registrars, as you heard the testimony, and present them with a legal order stating that this domain name is now the legal property of the state of Kentucky and we as the owner of the domain name could take steps with the registrar to stop illegal gambling.
But Brown says Judge Wingate gave the gambling sites a simple out, which allows them to retain ownership. If they will install software or engage in whatever they need to from a technological point of view to block Kentucky users and block themselves from Kentucky, he will relieve them of the seizure order.
It's not that easy says Washington attorney Edward Leyden, who represents some of the domain name owners. It reminds me of a guy I saw on the radio this afternoon who said if I send him fifty bucks, he'll send me a black box that makes sure I get 40% more miles per gallon.
Frankfort attorney William Johnson also represents some of the gambling sites. Johnson says Judge Wingate's ruling covers a lot of legal ground and he's carefully studying each point. One of the critical questions is the matter of jurisdiction.
And Johnson still questions whether the Justice Cabinet, instead of the attorney general's office, has legal standing to initiate and prosecute the lawsuit. There's certainly a question in our minds as to whether it's appropriate to use private council by the Justice Cabinet.
The state says it's not trying to shut down the gambling sites. It just wants access blocked to Kentuckians. And some damages would be nice, too, says Secretary Brown. We think there have been damages and it's obviously a normal thing to proceed in the civil suit, but our main interest and the governor's main interest all along was to stop the activity.
Asked how much money the state may seek in damages, Brown wouldn't say. He says, We're not at that point yet in the proceedings.