The Kentucky appeals court has overturned the Domain Seizure order of 141 “gambling” domain names.
You can read the decision here.
In a 2-1 decision the Kentucky Appeals court found the trial court, did not have subject matter jurisdiction over the case because domains are not “gambling devices” as prohibited by the Kentucky statute:
“Regardless of our view as the advisability of regulating or crimininalizing Internet gambling sites, the General Assembly has not seen fit to amend KRS 528.010(4) so as to bring domain names within the definition of gambling devices. Neither we, nor the Justice Cabinet, are free to add to the statutory definition. If domain names cannot be considered gambling devices, Chapter 528 simply does not give the circuit court jurisdiction over them.”court jurisdiction over them.”
“””Suffice it to say that given the exhaustive argument both in brief and oral form as to the nature of an Internet domain name, it stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute “a machine or any mechanical or other device…designed and manufactured primarily for use in connection with gambling.”
So Our first prediction of the year has come true.
However, this is a good news, bad news type of decision, because all the appellate court found was that domain are not gambling devices within the definition of the Kentucky law.
The court did not issue any opinion on the bigger issues of whether domains are subject to state regulation, whether domains can be seized without due process (although one judge did mention this in a separate opinion), whether domain registrars located outside a state are can still be subject to that state’s jurisdiction or whether a registrant located outside a state can still be subject to that state’s jurisdiction.
Moreover, the Legislature in Kentucky can simply amend the current laws definition of a “gambling device” to specific include domain names and then seize the domains all over again.
So bottom line, a win is a win, and the action of the appeals court solves the current crisis, but it does not give domainers, or gambling site owners, much reason to sleep any better.
Well said Mike.
I think this is just one of many threats against domains owners in the coming years.
The smart money has already moved their hosting and registrar services outside the USA.
– Richard
I think Richard’s comment about “smart money” moving hosting and registrar services outside the U.S. is not very smart. Those who have their own agendas will likely find all kinds of meaning in the Kentucky decision. The Appellate Court, however, took what I believe is the easy way out of a difficult situation.
Rather than getting involved in wide-ranging results of a decision that could determine Federal and State Constitutional issues, the Appellate Court easily found that the current statute under which the suit was brought did not apply to domain names. They therefore didn’t get to decide whether there was a gross violation of Due Process, whether domain name owners received equal protection under the laws of Kentucky as the state protects its own gambling interests.
While the dissenting opinion gave the Kentucky Legislature ammunition to amend its statute to include “computer addresses” because the computer is a “devise”, the court will STILL have to determine whether or not domain names are property or contract rights, if the new and improved statute is once again misused by an opportunistic politician out to impress the people of Kentucky that he is looking out for their interests.
Howard
Those who do not feel comfortable sitting and waiting to see if they become the next target for an overzealous prosecutor or government official, make sleep better having their assets offshore.
(Definition of a “gambling device” to specific include domain names and then seize the domains all over again.)
Should domains bee seen as gambling devices then any state or any country could seize each and every domain. They could simply explain the grab of the name as a future security procedure to prevent any name of being used for gambling or any other criminal use.
In the courts decision there are still too many open questions which need to be answered.
Offshore is a option but still no absolute security.
Surely putting assets ‘offshore’ will have no effect if the body that oversees domains is based in the USA?
That depends on the type of issue. The U.S. has a federal trademark law (ACPA) applying to all (?) states which can apply to .com domains, but there doesn’t seem to be one for domains as gambling devices other than Kentucky’s (sorry?) attempt.
Not that it won’t really stop one from trying if they feel like it and have the ability to pursue such a venture.
Read this article from a firm involved in the case:
http://randazza.wordpress.com/2009/01/20/breaking-news-kentucky-domain-case/
Marc writes that the court did rule on the states right to seize the domain names.
Richard
As Dave said It depends on the case.
In this situation that came up in Kentucky having your domains in an offshore registry definitely would have helped because the order of seizure went out to the registrars and those offshore just disregarded it.
Some of the US based registrars gave up the domains and had the order been upheld they would have had to give up the domains.
Now certainly things like WIPO’s and UDRP’s cut across the board to all ICANN registrars.
There seem to be two Richard’s here 🙂 I should have looked closer before posting.
Anyhow, I have my domains with Moniker, which I chose because of their good reputation and security against hijacking. And price. And convenience.
Now I’m wondering whether or not another registrar might offer more protection against seemingly arbitrary court rulings
Richard
I believe moniker.com is the best US registrar.
An offshore registrar will offer more protection in certain situations, it will have to be your call
“Those who do not feel comfortable sitting and waiting to see if they become the next target for an overzealous prosecutor or government official, make sleep better having their assets offshore”.
Unfortunately, Michael, the U.S. does not have a monopoly on overzealous prosecutors and government officials. They can be found most everywhere in the world. (look what’s happening in China).
However, the lesson to be learned is that there are registrars out there that do not look out for their customers such as eNom and GoDaddy that turned the subject domains over to Kentucky, while Moniker did NOT. Now those 2 registrars are in the embarrassing position of trying to get the domains back from Kentucky.
Howard
Certainly I would not advice people to use a registrar in China for their domains.
However I think people have less exposure in using a registrar offshore in a “safe” country that doesn’t have to honor decisions from courts in the US or China.
If someone wants to stay with a US registrar, then I agree they need to take note of past conduct of registrars that protect people’s interests and those that give them up away.
I agree with your assessment of US based registrars and personally, would recommend people use moniker.com, if they want to stay within the US
“In a 2-1 decision the Kentucky Appeals court found the trial court, did not have subject matter jurisdiction over the case because domains are not ‘gambling devices’ as prohibited by the Kentucky statute:”
Try:
In a 2-1 decision, the Kentucky Appeals court found the trial court did not have subject matter jurisdiction over the case, because domains are not ‘gambling devices,’ as prohibited by the Kentucky statute:
ALSO:
“So bottom line, a win is a win, and the action of the appeals court solves the current crisis, but it does not give domainers, or gambling site owners, much reason to sleep any better.”
TRY:
“So, bottom line: a win is a win, and the action of the appeals court solves the current crisis. But, it does not give domainers or gambling site owners much reason to sleep any better.”