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Kentucky Judge Upholds State's Gambling-Domain Grab 272

Posted by timothy
from the always-think-forfeiture dept.
JohnHegarty writes "A Kentucky judge has upheld that state's seizure of some of the world's most popular online casino domain names, ruling they constitute a 'gambling device' that is subject to Kentucky's anti-gambling laws." Wasn't it surreal enough on the first round?
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Kentucky Judge Upholds State's Gambling-Domain Grab

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  • This just in (Score:5, Interesting)

    by Shivetya (243324) on Tuesday October 21, 2008 @09:58AM (#25452863) Homepage Journal

    Congress upholds right of DHS to confiscate your stuff for 24 hours.

    I know, but is anyone surprised. Really, gambling is in that same circle as cigarettes and alcohol. Somehow the states have held on to their rights to exclusive domain over them within their borders whereas they lost about every other regulatory ability to the feds.

    WTO maybe? Some world body should laugh them off.

    • by goombah99 (560566) on Tuesday October 21, 2008 @10:13AM (#25453059)

      Some world body should laugh them off.

      Ha! At the end of the day your internet connection does have to come to your house and somebody has to install it and the ISPs router in that state. Either the installation company (e.g. Qwest, SBC, Comcast) or the ISP if different have people paid on salary working in your state.

      As a condition of doing bussiness the State can have it block or re-route IP addresses as a condition of the ISP doing bussiness in the state.

      One can quibble about how the ISPs will be able to block dynamic changes in host IPs, but look if each hour the ISP does a DNS lookup on the domain name then blocks the resolved IP it wil be plenty effective.

      That leaves the gambling sites to rely on Proxies, TOR, or constantly changing domain names, all of which will effectively gut their clientele.

      The ultimate weapon for the state in this case is that state can legally declare all gambling debts unenforcable. If they allow cost recovery from VISA or Paypal, the gambling sites may not only find they can't do bussiness in Kentucky but that from VISA's point of view they can't do bussiness at all with VISA.

      Given the latter death threat I suspect there's going to be cooperation on this at some level.

      • by Anonymous Coward on Tuesday October 21, 2008 @10:22AM (#25453173)

        So if the state doesn't approve of a radio station can they shut down the transmitter in another state or demand that the station modify all radios to not receive their signal? This falls under violating interstate commerce and KentUHky will likely find itself being forced to reverse by the feds.

        • by cayenne8 (626475) on Tuesday October 21, 2008 @10:42AM (#25453419) Homepage Journal
          Isn't the US currently under sanctions from the WTO for its discrimination against foreign based gambling sites, while allowing a select few US based ones?

          I can't imagine this case will help matters any...

          • I believe the issue was largely that it blocked most online gambling but left online bets on horse-racing intact. This was deemed discriminatory. Had the US outlawed all online gambling, it would likely not have been subject to sanction.

      • by Zenaku (821866) on Tuesday October 21, 2008 @10:42AM (#25453413)

        The ultimate weapon for the state in this case is that state can legally declare all gambling debts unenforcable.

        The state declaring it won't make it so. Gambling debts will still be enforced by large men in very nice suits, who carry heavy objects and know a great deal about the anatomy of the human knee.

      • by HungryHobo (1314109) on Tuesday October 21, 2008 @10:55AM (#25453683)

        But that's not what they're doing.
        They're not rerouting traffic in the state.
        They just took the domain names.
        As in they can send joe blogs in japan to their own servers when he looks up one of those sites.

        Imagine that you ran a mail order buisness, your "domain name" is your postal address.
        You live and run your buisness from Iceland say or China.
        A judge in an american state decides that you are competing with local buisnesses and signs an order taking your postal address and from then on any post sent from anywhere be it America, Europe or elsewhere will not be sent to you but rather to the judge.

        The basis of course being that your postal address is an item required to do illegal buisness with people in an american state.

        Clear enough for everyone?

        The best solution would be for any registrars outside this juristiction to simply list the correct ownership information for the domains .

    • by lionchild (581331)

      I think, in my mind, that begs the question: What do we do when an Islamic state with access to Domain Registry, decides they want to take control of all domain names that they feel are unacceptable to their beliefs and laws? Is the US just the big bully on the block when it comes to controlling Domain Names in this respect? What if Nevada wants to assume control over those Domain Names and deploy them under 'Eminent Domain' laws in order to give to a 'responsible party' in order to create more public reve

  • I can't WAIT to see the flood of suits in a friendly Kentucky court for and against all the domain squatters now, based on this ruling. What a mess.

    • Fun one to try: find some european law which a few of the big US companies are breaking and try the same trick. Wouldn't it be fun to own www.microsoft.com or www.google.com

      • by G0rAk (809217)

        Fun one to try: find some european law which a few of the big US companies are breaking and try the same trick. Wouldn't it be fun to own www.microsoft.com or www.google.com

        Actually some French students did try to get yahoo.com to comply with French law around the display and sale of Nazi paraphernalia a few years back. The case was thrown out in the US.

        • Ah but once precedent is set he can just re-file in Kentucky! :D

          • by G0rAk (809217)
            Excellent point. So if you find any website you dislike, anywhere in the world, as long as it might violate a Kentucky state law you can get it's domain name pwnd by the court.

            Shudder. I hope this gets overturned soon.
  • by lrsach01 (181713) on Tuesday October 21, 2008 @09:58AM (#25452871)

    Basically the judge didn't throw the case out. He is letting it proceed. It's not the wholesale grab of domain names some people want you to believe.

    • by Kierthos (225954) on Tuesday October 21, 2008 @10:09AM (#25453013) Homepage

      It's still a bad move. Basically, the judge should have thrown the case out because it's a piece of shit (or whatever the legal term is). If any of the gambling sites had corporate sites in Kentucky or web-hosting in Kentucky, then the suit has some legal basis.

      But since they don't, it's setting a bad precedent of "Well, it's illegal here, so our laws apply to the website no matter where it's located".

      Hang on tight, kids, it's a slippery slope coming up!

      • by zappepcs (820751)

        The flood of gambling proxies being set up in
        3...
        2...
        1...

        -x... profit

      • by ArhcAngel (247594) on Tuesday October 21, 2008 @10:30AM (#25453265)

        the judge should have thrown the case out because it's a piece of shit (or whatever the legal term is).

        I believe the legal term is P.O.S.

      • Yep. Even though the lawyers argued Kentucky lacked jurisdiction, he ruled against them. Interestingly they also argued that a domain name being part of a contracted service as opposed to a property that they owned, the judge also dismissed that argument too.
        • Best comparison: you run a mail order buisness in europe which competes with Kentuky buisnesses.
          Kentuky judge confiscates your postal address(it of course being your property) and has all your mail sent to whoever he choses.

          sounds reasonable.

          • business not buisness
            Kentucky not Kentuky
            chooses not choses

            The spelling is weak with me today.

          • by sumdumass (711423)

            It's not really like that at all. It's more like what you said but the judge intercepts all mail originating to and from your address from within the state.

            You can't compare a virtual address to a physical one. No matter what scenario you want to contrive, if it is legal in your home country or whatever, then your physical presence and physical address allows you to participate in whatever there. This is more about doing illegal business inside borders that have outlawed specific behavior which happens to b

      • by ajs (35943)

        I think this is probably going to be a good thing in the long run. This case should move past the state level, as a federal decision on this would set national precedent. The question might even have to go to the SCOTUS, since it's not really clear how states interact with the Internet, and this might get surreal enough to touch on things like foreign relations and the ability for the executive branch to make treaties.

    • by Mr. Slippery (47854) <.tms. .at. .infamous.net.> on Tuesday October 21, 2008 @10:15AM (#25453081) Homepage

      It's not the wholesale grab of domain names some people want you to believe.

      The issue is not whether it's a "wholesale grab" or not. The issue is that if Kentucky has authority to seize a domain name used for gambling, any state has authority to seize a domain name used for anything in state law, and the net is quickly reduced to the lowest common denominator.

      (Indeed, seems to me - though IANAL - that if this nutcase theory of jurisdiction holds, any country hostile to free speech can seize domain names left and right. Germany can seize "HolocaustDeniers.org", Russian can seize "PutinSucks.com".)

      • Re: (Score:3, Insightful)

        by mollymoo (202721)
        Can a Kentucky court force someone in another state to do something? Another country? They can ban it all they like, but if they can't actually compel the person who runs the servers to turn them off it's just legal masturbation.
      • by Kadin2048 (468275) <slashdot.kadinNO@SPAMxoxy.net> on Tuesday October 21, 2008 @11:42AM (#25454531) Homepage Journal

        (Indeed, seems to me - though IANAL - that if this nutcase theory of jurisdiction holds, any country hostile to free speech can seize domain names left and right. Germany can seize "HolocaustDeniers.org", Russian can seize "PutinSucks.com".)

        Well, they can try, but I don't know how they actually would ... the reason Kentucky was able to do this is because (as I understand the mechanics of it) ICANN is incorporated in the U.S., and they served them with a court order.

        ICANN probably should have just told them to get stuffed, but they didn't (probably because they didn't want to get dragged into it, or get fined for being in contempt). But it's because they're located in, and incorporated in, the U.S. that gives a penny-ante court in Kentucky any sort of leverage.

        A court in Germany could try serving ICANN with papers ordering them to turn over HolocaustDeniers.com or whatever, but I don't see why ICANN would comply -- and, more importantly, I don't see what sort of leverage a court in Germany would have to force them to. They could probably do the same thing to the registrar that controls the ".de" TLD, which I assume is incorporated in Germany, but not if it was a gTLD (.com, .net, .org, &c.).

        I'm also not sure that the court in Kentucky would have had as much success at grabbing the domains if they'd been registered under the country code of some other country. E.g., if the site had been "GreatGambling.co.de", and they had ordered ICANN to transfer it, ICANN might have been able to say to them with a straight face that it was impossible, and they'd have to talk to the registrar for .de, which would be some company in Germany. But they can't pass the buck and claim it's beyond their control when it's a gTLD, since they oversee them.

        The bottom line to all of this is that people need to realize that all the gTLDs are not some sort of international zone. At the end of the day they are basically .us domains without the explicit ".us" at the end. If you're doing something that's considered shady, or might possibly be considered shady, by virtually any court in the U.S., you would be better off getting a domain in a ccTLD from a country that's more tolerant, rather than a gTLD domain. Anyone with a gTLD domain has it basically at the whim and mercy of any state court judge in the United States; depending on the subject matter or the purpose of the site, that might be an improvement over some other country (Chinese democracy, lambasting various monarchies), or it might be a huge liability (gambling, DRM breaking, certain types of porn).

  • DNS (Score:5, Funny)

    by Jaysyn (203771) <jaysyn+slashdot@@@gmail...com> on Tuesday October 21, 2008 @09:59AM (#25452881) Homepage Journal

    So is it time to update the DNS servers to ignore Kentucky?

  • So... (Score:3, Interesting)

    by cosmocain (1060326) on Tuesday October 21, 2008 @10:02AM (#25452911)
    ...is Kentucky now responsible for the casino-spam flooding my inbox? Where can i sue'em?

    A man can dream...can't he?
  • The book Blown to Bits we previously discussed [slashdot.org] goes into this in some detail but there is a clear, and increasing, problem that legislatures are very far behind the curve on the global nature of the internet. Not only can district courts in the US have a say, potentially, on the content hosted on a server in another country - let alone another state - but it also creates a pressure to host your servers in the country with the most lax laws around content control.
    The application of laws designed to deal with print or broadcast media being applied to the internet - where ISPs are neither publishers nor distributors, from a strict legal perspective - is fraught with difficulty.
    The application of social laws, like restricting your citizens access to gambling, also has an inherent problem when the social sphere in question is virtual. The law givers reaction often seems to be to target the technology when the social problem is what the law is meant to address.
  • by Jason Quinn (1281884) on Tuesday October 21, 2008 @10:04AM (#25452929)
    What a lie! Freedom so long as it is granted by the state is more like it. I should be able to have a domain name regardless of what it says. And on internet gambling in general, my money is my money, so I should be allowed to gamble with it if I so choose. If the government did its job and was there to protect the people rather to limit them, they would investigate online casinos for fairness and punish those that aren't playing square or if they are offshores, warn consumers about their practices.
  • Poorly Written (Score:4, Insightful)

    by autocracy (192714) <slashdot2007NO@SPAMstoryinmemo.com> on Tuesday October 21, 2008 @10:04AM (#25452939) Homepage

    Including by The Register. The judge is upholding his own ruling now that the companies that lost their domains get a chance to object. The loss of domains was done under a sealed order.

    I can't find any legitimate reason for this to have been done under a sealed order (what were they going to do... hide the domain names), or before arguments were made. Here's hoping this gets fixed when it is actually appealed.

    As for the circuit judge, Wingate (heh... like the old proxy software...), I think he's either making a political play to his career, or has a heck of a power complex. Next up, watch him issue an order that takes away my /. account for criticizing him. -.-

    • Re: (Score:3, Insightful)

      by sumdumass (711423)

      I can't find any legitimate reason for this to have been done under a sealed order (what were they going to do... hide the domain names), or before arguments were made. Here's hoping this gets fixed when it is actually appealed.

      It was probably to hide the names of the domains in order to secure them before trial.

      KY hasn't really taken the domains, they have frozen control of them in an attempt to control assess while another procedure takes place. This is similar to the feds locking a bank account befor

  • Power (Score:5, Interesting)

    by Andr T. (1006215) <andretaff@gmailP ... minus physicist> on Tuesday October 21, 2008 @10:05AM (#25452949)

    Every day there's news here about Government trying to control the Internet. China with their great firewall, the UK and their laws, Australia and their version of internet control. Government gets crazy when they sense there's something they can't control. Judges, Senators, Presidents, the whole system.

    What makes me sad is that I always thought it'd be harder to 'control' the internet, but it seems they'll do it sooner or later.

    • that attempting to control the internet also destroys much that is good about the internet. you can't turn the internet into a controlled medium like television without also making it essentially useless for the things that made it useful in the first place

      the point is, you really can't warp the internet, you can only kill it. and the absence of the internet is not something people will accept once they get a taste of it

  • by Jeff Hornby (211519) <jthornby@@@sympatico...ca> on Tuesday October 21, 2008 @10:06AM (#25452975) Homepage

    Isn't Kentucky where tobacco comes from? Why doesn't a judge in, say, New York state order the seizure of the name Kentucky for poisoning the good people of New York?

    It probablyt doesn't really matter. The judge is going to leave office soon and seek a more public office, probably running for the Senate or state governor (this can't be anything but a publicity stunt) and the order will get overturned on appeal.

  • by russotto (537200) on Tuesday October 21, 2008 @10:07AM (#25452977) Journal
    ...5...4...3...2...1 A state judge rules that state officials have the right to take domain names registered elsewhere and belonging to organizations based elsewhere? This one is not staying in the state courts.
  • by Trip6 (1184883) on Tuesday October 21, 2008 @10:08AM (#25452995)
    "Among other things, the state says online gambling drains the state of money by undermining horse racing, a key tourism industry for the state."
    • Re: (Score:2, Funny)

      by Anonymous Coward
      So rather than go to Kentucky to bet on the horses, people will go to Kentucky and log on to PokerMad.com and gamble there instead?
    • Re: (Score:2, Interesting)

      by Calydor (739835)
      Which, in fact, is a complete mock-up of how things work. Are you going to stop going on ski trips because you can visit an ice skating rink? Are you going to stop taking a week at Mallorca because you can go to the solarium? As he says, horse racing is a Key Tourism Industry. People go to WATCH, to experience it. Being able to place bets on the net is not going to satisfy that desire. It's like saying, "Oh, I got this CD of my favorite band, so now I don't have to go to their concert." It just doesn't w
  • So based on that ruling. I am living in the UK but I can not just sue random domains because i can reach them via a domain name.. Sweet.

    *nips off to see his lawyer about lawsuits*

    • what does *nips mean?

      • by d3ac0n (715594)

        Well, I suspect he means one of the following;

        1)Nips - racist language used to describe people of Japanese/Asian descent

        2)Nips - Nipples. I hope I don't need to explain that one.

        3)Nips - to leave, or go somewhere in an abrupt or rapid fashion.

        I'd imagine he means #3, unless his lawyer is either Japanese, or buxom. (Maybe both. That would be nice.)

      • Root vegetables.
  • Utah (Score:3, Interesting)

    by Jaysyn (203771) <jaysyn+slashdot@@@gmail...com> on Tuesday October 21, 2008 @10:28AM (#25453237) Homepage Journal

    So what happens when Utah starts doing the same thing to your porn sites or issuing warrants for people drinking on their *public* MySpace / Facebook pages?

  • by houghi (78078) on Tuesday October 21, 2008 @10:30AM (#25453273)

    The banks is where most of the gambling takes place and that not even with their own money, but other peoples money.

  • Before Kentucky is sanctioned by the WTO?
  • by alta (1263) on Tuesday October 21, 2008 @10:34AM (#25453331) Homepage Journal

    So I think alabama should sieze these domains from those bastards in kentucky.

  • by RiffRafff (234408) on Tuesday October 21, 2008 @10:39AM (#25453383) Homepage

    If this goes far enough, there will be threats of action regarding a blatant disregard of international commerce treaties. Seems to me that point came up before when the US tried to shutdown off-shore gambling.

    Ah, found it:

    http://news.cnet.com/WTO-slams-U.S.-Net-gambling-ban/2100-1030_3-5658636.html [cnet.com]

  • Oh wait, so it is not about some southern Christian social conservative right wing kind of thing to keep people from sin, but all about political pandering and "online gambling drains the state of money by undermining horse racing." ( http://news.cnet.com/8301-13578_3-10052137-38.html [cnet.com] )

  • This makes sense in a way. I mean, really, if the government can't tax it... it's probably illegal.
  • I'm still confused. When did they get on the Internet in Kentucky. Isn't Kentucky like the boonies where hillbillies and gay cowboys live?
  • Truly amazing. By that same argument, Calling me on my cell phone from Kentucky makes me virtually present in Kentucky as well.

    I hope it won't be long before a higher court calls him an idiot.

  • by MarkvW (1037596) on Tuesday October 21, 2008 @11:23AM (#25454183)

    By seizing the domain name, the State now owns or controls the domain name. It owns or controls it in the home state, and by virtue of the full faith and credit clause of the U.S. Constitution, it owns or controls it in all the states. This is part one--the acquisition of the right.

    Part two--the enforcement of the right--will be very interesting. Destruction of the domain's ability to do business in the home State appears to be a trivial problem. Destruction of the ability to do business in each of the other states is a tedious process, but thanks to the full faith and credit clause, a doable thing.

    The dormant Commerce Clause, however, looms over all of this as the big Green Monster looms over Fenway. In short, the several states can't go writing laws that straightjacket interstate commerce. But addressing that question is probably too much trouble for to take for the two or three people that will read this post.

  • As a former resident, I can say that this is no surprise. Kentucky is probably one of the most corrupt states in the union. The entire state is governed by old money and the horse racing industry. Every governor in my life time has had a major scandal of some sort. Kentucky is the best argument against States' rights that I can think of. The bridges on Interstate 65 have been being painted for about 8 years now because of the corrupt transportation cabinet forcing various contractors to pay bribes that drov
  • Many of those domains have ownership outside the United States, and they think they can just "seize" them? If this was actual Real Estate we were discussing here, wouldn't that qualify as empire-building? Oh, wait, I forgot, that's my country's new shtick, isn't it? The Empire of the United States of America? :p

    I'll tell you what I REALLY think this is about: They're trying to create the foundations for government censorship of the internet in general. Next step, if this is successful, would be to seize t

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