In a censorship case with international repercussions, the Kentucky Supreme Court ruled Thursday that owners of gambling Web sites must appear in court to defend themselves against Kentucky's attempts to seize their domain names and stop illegal Internet gambling.
The Internet gambling sites had been represented in court by pro-Internet gambling associations and players' groups — such as the Interactive Media Entertainment and Gaming Association and the Interactive Gaming Council — not by the owners of the Web sites, who have remained anonymous.
One of the lawyers for the gambling sites said Thursday that he expects the domain name owners to comply with the Supreme Court's decision.
"All of the parties are going to get together and determine how we are going to proceed and comply with this technical issue," said Jon Fleisch aker, a Louisville lawyer who represents Interactive Media Entertainment and Gaming Association. "I think it is a very, very temporary setback. It's a very unusual decision because it signals an interest in the merits of the case and gives us a road map on how to get back to the Supreme Court quickly."
Justice and Public Safety Secretary J. Michael Brown said the state was pleased with the ruling, "in that it allows us to continue our efforts to curb illegal Internet gambling."
If the state succeeds, online gambling advocates said Internet freedoms could be curtailed around the world.
"There are fundamental freedoms at stake in this case, not only the freedom of poker players in Kentucky and globally, but Internet freedom across the globe," the Poker Players Alliance said in a statement. "The commonwealth's effort at such a bold, broad and, we believe, unlawful seizure sets a dangerous precedent for anyone who uses the Internet."
In 2008, a Franklin Circuit Court judge said the state could seize 141 Internet domain names of online gambling sites that were allegedly taking illegal bets from Kentuckians. Lawyers acting on behalf of the gambling sites appealed to the Kentucky Court of Appeals to stop the seizure, which the appellate court granted.
State officials appealed to the Kentucky Supreme Court, arguing in part that those who have argued on behalf of the domain names had no legal standing to do so.
The court, in a 6-0 opinion, said the associations must disclose the companies that they represent. "The problem, however, is that (the Interactive Gaming Council) fails to disclose who these registrants are," wrote Supreme Court Justice Mary Noble.
The decision leaves open the possibility that the case could move forward if one of the domain owners comes forward to establish legal standing. The court's opinion also does not address some of the thorny underlying legal issues surrounding the case — such as whether the state has the authority to seize domain names run by out-of-state entities.
Those who represent the Internet gambling interests say the state is overreaching its authority. The state, however, contends that the sites are operating illegal gaming activities in Kentucky and therefore are breaking state law.
Gov. Steve Beshear has pushed to shut down the gambling sites, saying they undermine horse racing by creating untaxed competition. By some estimates, online gambling is a $20 billion a year industry, much of which goes untaxed.
The 141 domain names have continued to operate as the case works its way through the courts.