UK Court Says Kentucky Has No Right To Seize Gambling Domain Name

from the not-that-it-cares dept

We've covered the bizarre legal battle in Kentucky, where the governor tried to have a long list of gambling-related domain names (none of which had anything to do with the state of Kentucky) declared "illegal gambling devices" so that the state could seize the domain names. The governor has been pretty open that this has nothing to do with any moral issue over online gambling, but is a blatant attempt to help protect local gambling establishments in the state. Of course, it's ridiculous to think that a state governor could claim the right to seize domain names that are not based in Kentucky at all, and after a lower court (that didn't seem to understand the issue) sided with the governor, an appeal court overturned that ruling. Rather than recognize how silly this campaign is, the case is going to the state Supreme Court.

But, apparently the lawsuits aren't just happening in Kentucky. Michael Scott points us to the news that one of the companies targeted by Kentucky brought a lawsuit both against Kentucky and its own registrar in the UK to get a ruling that it is not subject to the whims of Kentucky politicians. The state of Kentucky ignored the proceedings, which resulted in the court agreeing that Kentucky has no right to seize the domain name. Of course, the state of Kentucky probably couldn't care much less about what a court in England thinks (which explains why it didn't even bother to respond), so the victory may be somewhat meaningless. However, at the very least, if Kentucky somehow wins its case in the US, perhaps the registrars in the UK can point to this ruling to refuse handing over the domain names.

Filed Under: domain names, gambling, kentucky, uk

Kentucky's Attempt To Seize Gambling Domain Names Goes To State Supreme Court

from the waste-of-kentucky-taxpayer-dollars dept

A year ago, we were surprised to hear that Kentucky's governor was trying to seize the domain names of a long list of over 100 sites that had something to do with gambling. The governor was basing this on a Kentucky law that let the government seize "devices" used for gambling, even though none of the sites in question were based in Kentucky. The governor -- who many say did this to protect local Kentucky gambling operations -- compared these website to "a virtual home invasion." While a judge originally was going to allow the seizure, the state appeals court overturned the ruling, saying that it was clear that a domain name is not a gambling device.

Rather than back down, the governor pushed ahead and is using taxpayer money to appeal the ruling. Ragaboo alerts us to the news that the Kentucky Supreme Court is getting set to hear the case. It's difficult to see how the governor has much of a leg to stand on here. He's trying to seize the domain names of businesses operated entirely outside the state. Allowing such a seizure of domain names would set a horrendous precedent and create all sorts of problems. Hopefully the Kentucky Supreme Court sees this, and Governor Steven Beshear realizes it's best to give up this dangerous crusade.

Filed Under: domain names, gambling, kentucky, steven beshear, supreme court

Minnesota Gives In; Won't Block Gambling Sites

from the good-for-them dept

Back in April, the state of Minnesota tried to force ISPs to block certain gambling websites. Similar attempts had been tried in a few other states, and quickly shot down by the courts -- and it didn't take long for a lawsuit to emerge in Minnesota. However, the good news is that the state has apparently agreed to back down rather than trying to fight a bogus and costly lawsuit. Basically, it sounds like enough lawyers explained to state officials that their likelihood of winning was pretty slim -- so the state just folded. At least they didn't keep trying to waste taxpayer money trying to fight for such censorship.

Filed Under: censorship, gambling, minnesota, websites

Minnesota Sued Over Online Gambling Ban, While Frank Again Introduces Bill To Legalize It

from the know-when-to-hold-em dept

We noted several days ago that Minnesota was trying to force ISPs to block gambling web sites, going down a path trodden by several other states. That path, of course, has always ended in failure after the courts have weighed in. It looks like the courts will now get their chance to rain on Minnesotan politicians' parade, as a trade group has sued the director of the state's Department of Public Safety's Alcohol and Gambling Enforcement division to stop the ban. The group uses the suit to remind the director that he doesn't have the authority to mandate the blocking by ISPs, something the court will likely reinforce.

Meanwhile, online gambling's biggest friend in Congress, Massachusetts Rep. Barney Frank, has again introduced legislation that would legalize and regulate online gambling in the US. It sounds pretty much the same as his earlier attempts, all of which have failed, and would take the eminently reasonable step of allowing Americans to gamble in a regulated environment where they're protected by rules and law, as opposed to the current situation where they're pushed into the gray market (or worse), and have no protection. Frank also says he'll introduce separate legislation that will stop the enforcement of the UIGEA, which says that banks must stop processing any transactions that fund online gambling. At least one big casino company seems to think Frank's got a good chance of finally getting his law through: Harrah's, which recently hired the former CEO of major online gambling company PartyGaming to head its online efforts ahead of legalization.

Filed Under: barney frank, gambling, minnesota, online gambling
Companies: harrah's, partygaming

Minnesota Is The Latest State To Try To Force ISPs To Block Gambling Sites

from the this-will-end-badly-too dept

There have been a few attempts by state governments to force ISPs to block certain sites, and such attempts almost always end badly. Recently, for example, the state of Kentucky has been not just trying to block access to gambling-related websites, but to seize the domains in question. That failed when the courts pointed out how ridiculous it was. Perhaps the most famous such attempt was Pennsylvania's law to try to force ISPs to block "undesirable" sites from a list the gov't would put together. A federal court tossed the law, saying that it was unreasonable. You would think that other states would take notice before trekking down a similar path. But, apparently the news hasn't reached Minnesota.

Slashdot points out that Minnesota is trying to twist a law from half a century ago to mean that ISPs need to block gambling websites. Basically, the law says that common carriers need to comply with government requests to block gambling services. Of course, that assumes that ISPs are, in fact, common carriers -- a point that many would dispute. Also, the law was clearly intended for a very different purpose than someone using a broadband connection to access a gambling site. Still, gambling is another topic that politicians love to grandstand about, so expect this to keep moving forward, even if it makes no sense and has little chance of surviving a legal challenge.

Filed Under: blocking, gambling, isps, minnesota, websites

Frank To Push For Repeal Of Internet Gambling Ban

from the busted-out dept

Congressman Barney Frank will apparently soon introduce legislation to repeal the US ban on online gambling, as the EU looks like it's preparing to push the WTO to take action against the ban. Along with being ineffective and useless, the ban falls foul of WTO regulations, and could lead to the US being subject to punishments from the organization. It sounds as though the WTO would like to give the US government the chance to sort out the illegal ban on its own before taking action on a complaint about it. Though, even with the changed political climate in the US, it remains to be seen if the repeal could stick. It's also really hard to see how a ban on online gambling, and forcing financial institutions to police it, remains preferable to a well-regulated environment that protects consensual bettors. Hopefully US politicians will agree.

Filed Under: barney frank, gambling, online gambling

Court Says It's Not Online Gambling If You Can Renege On A Bet

from the hello-loophole dept

The US has always had this odd hatred for online gambling -- but no state has been more aggressive about the issue than Washington state -- even to the point of threatening people with arrests for even talking about online gambling. So, you can imagine that the state didn't look too favorably on the launch of a person-to-person "wager" site called Betcha.com which claimed it had found a nice loophole that made it legal: you could renege on your bet. Yes, if you lost a wager, you could click a button saying "I refuse to pay." The catch, of course, was that the site had a rating system, and if you reneged, it was likely to harm your rating, and others might refuse to bet against you. Betcha claimed that the presence of the renege button meant that it wasn't actually gambling, because you never actually had to bet any money.

The state of Washington not only disagreed, it took a month or so until state authorities raided the company, arrested its founders and seized its computers. That seems pretty extreme for what does seem to be a rather open question in the law. And, in fact, a state appeals court found that the Betcha founder is right: the presence of the renege button means that the site is not a gambling site:

"Accordingly, there is nothing risked, which is the essence of both the common law and statutory definition of 'gambling.'"

Of course, that doesn't mean Betcha is coming back into existence. Since its founder (who has a law degree and had carefully researched gambling laws to make sure the loophole was legit) was arrested, thrown in jail, extradited to Louisiana, charged (in Louisiana) with gambling-related felonies finally forcing him to negotiate a plea bargain, dropping the charges if he agreed to certain conditions. With that experience in mind, restarting the site and risking it happening again just doesn't seem that appealing.

So, way to go Washington State -- you tossed a guy in jail for a completely legal web business.

Filed Under: gambling, online gambling, renege, wagering, washington
Companies: betcha

Court Of Appeals Overturns Kentucky Gambling Domain Seizure

from the good-ruling dept

Back in September, the state of Kentucky tried to seize over 100 domain names, claiming they violated a local state law against "gambling devices." None of the domains were run or hosted in the state of Kentucky, which made this quite a stretch in legal terms. While many of the domain names were for gambling websites, some were merely parked domains. The politicians who ordered the seizure were quite open that this was an attempt to "protect" local gambling interests -- but it seems like an incredible legal reach to claim that because of local protectionist laws, the state somehow has the right to seize domain names from around the world. The domain owners complained, but a local Kentucky state court ruled in favor of the government. However, an appeals court quickly told the state to hold off seizing the domains until it could review the case.

That court has now overturned the lower court ruling saying that a domain name is clearly not a gambling device, and is not covered by the law. However, this does potentially leave the door open for Kentucky politicians to change the law to include domain names... at which point we'll need to go through this whole silly legal battle all over again.

Filed Under: domain names, gambling, governor, kentucky, online gambling

Are Online Penny Auctions Actually Gambling?

from the here-come-the-regulators... dept

A few weeks back, we wrote about a site that seemed to have modified the old "dollar auction" concept and created a borderline evil business plan that would get plenty of people to pay money to "bid" on way underpriced goods. People keep bidding, because the costs seem so low -- but since everyone has to pay to bid, the companies ends up making a ton of money -- often many times the actual cost of the product. Basically, the company and whoever "wins" the auction are likely to make out okay -- while every other bidder loses. Apparently, there are a number of such sites doing similar models, and the UK government is noticing that it's pretty similar to gambling and probably should be regulated as a gambling site.

The reasoning is that people are paying money and might not get anything back for it -- which makes it akin to gambling. However, depending on how these sites are run, it's not as though the results are a real gamble -- it's still about whoever bids the highest for a good, so it seems like a stretch to call it gambling. It is a dumb move to get involved in any of these auctions in the first place (in many ways, worse than gambling), but that doesn't necessarily mean that they should be regulated like gambling sites.

Filed Under: dollar auction, gambling, penny auctions

Gaming Giants Still Can't Make Up Their Mind On Internet Gambling

from the wanna-bet? dept

The American Gaming Association, the casino industry's biggest trade group, is struggling to reach a consensus on internet betting, as its members take up divergent viewpoints. Some casino companies support federal regulation for it, while others want states to be able to regulate it (though maybe not Kentucky); others, of course, want to see the blanket ban continue, fearful of anything that might let new competitors in to the market. The AGA's latest approach appears to be to support legislation to study whether to legalize online betting -- which, we're pretty sure, sounds about as wishy-washy as could be.

The facts surrounding online gambling in the US are already pretty clear: previous legislative efforts may have reduced online gambling, but they've also driven American bettors to largely unregulated services and forced them to use some other often-shady services to fund their activities -- since US banks are given the responsibility to stop gambling sites' funding. The result is that gamblers keep up the same activity they were doing before, but are now exposed to more danger and risk, while US authorities are missing out on the chance to collect some taxes. This still seems pretty irresponsible, since gaming regulators in mature markets would argue that driving consumers into unregulated territory where they're not protected by laws and rules governing casinos isn't a great idea.

Meanwhile, the AGA's waffling isn't a surprise, since many of its members hate to see new competition in any form. But existing casino operators are, arguably, better placed than anyone to compete in new, highly regulated markets that don't require huge capital outlays on the scale of expensive new properties. Also, it's hard to understand how more competition for gambling dollars could hurt consumers, when competition might actually deliver them a number of significant benefits, particularly over gray-market services of questionable legality.

Filed Under: casinos, gambling, online gambling
Companies: american gaming association