- This topic is empty.
-
Posts
-
Opposition mounts against Governor Beshear’s attempt to hijack international domain names
October 7, 2008 (InfoPowa News) — On the eve of an important court case that could have international consequences regarding Internet domain names, opponents of a move by the state of Kentucky to take over 141 domain names of online gambling operators held a discussion and press conference Monday afternoon to denounce the action.
Hosted by the personal freedoms body the Bluegrass Institute, the event was attended by a wide range of industry and mainstream media, industry legal representatives, and freedom of speech / Internet freedom advocates.
Among the organizations were Associated Press, iMEGA, the Poker Players Alliance, Americans for Tax Reform and the Media Freedom Project, Lexington-based WTVQ and WAVE 3 TV, the Internet Commerce Association, local CBS, NBC and ABC associates.
It has also emerged that on Monday out-sourced lawyers for the state officially advised opposing lawyers that the U.S.-based domain registrar GoDaddy (which has a legal representative in attendance for the case) had cooperated with an earlier order from the Frankfort Circuit Court’s Judge Thomas Wingate to relinquish to the court certain domain certificates pending the outcome of the case. Prior to this it had been claimed that the domain owners had not been informed by the State of its intentions and moves.
It is not yet clear which of the 141 domain certificates in dispute have been handed over, although some reports claimed that Tokwiro Enterprise’s UltimateBet.com, Sportsbook.com associate CakePoker.com, and Microgaming-powered DoylesRoom.com were among them, along with USABingo.com, SlotsofFortune.com, and BingoWorkz.com.
Judge Wingate will preside when the hearing resumes on the morning of Tuesday October 7 in the Frankfort Circuit Court, where lawyers working for the state of Kentucky on a contingency basis first filed the state’s attempt to commandeer the online gambling domains.
Last week the Judge granted a continuance to enable interested parties to establish standing and submit legal briefs on the issue.
Legal argument is likely to include whether the terms “gambling devices” in state law can be interpreted to embrace Internet gambling domain names.
The Poker Players Alliance (PPA) has urged its members, and poker players in general, to communicate their opposition directly to Kentucy state officials, with local PPA director Rich Muny and the PPA website claiming that some 1,800 letters have already been sent, many by the PPA’s 16,000-strong Kentucky membership. The PPA claims a total membership of over a million poker players.
The organization recommended a theme of: “Poker is not gambling, nor is it a crime. Poker is a game of skill that was unfairly and improperly included in this action, and I request the immediate removal of the poker-only sites from your list of domains to seize.”
Kentucky’s action and its approval by Governor Beshear continued to come under attack Monday.
WTVQ quoted Derek Hunter of the Media Freedom Project: “This is a dangerous step in regulating what people can and can not access on the Internet. Who is to guarantee it will stop here?” He was responding to Governor Beshear’s claim on the station that online gambling sites “prey on Kentucky citizens.”
Earlier, Hunter said that the Kentucky action raises constitutional issues about due process, and that the government should not control Internet commerce.
Jim Waters, Director of Policy and Communications for the Bluegrass Institute, said: “What happens here is being watched across the world.” In a separate interview with Poker News Daily, Waters also said that the original seizure by officials in Kentucky was done secretly behind closed doors, adding: “People in Kentucky haven’t even had the opportunity to express their views to elected officials.”
A statement posted on iMEGA’s website proclaimed: “Should the actions of Kentucky’s chief executive stand, the harm to Internet freedom would be immense. What a powerful weapon would be placed in the hands of government: to arbitrarily seize politically, religiously, or culturally based Internet domains that may run contrary to the views of those in power.”
“Nobody has been as reckless as Kentucky has on this,” said Edward James Leyden, legal representative for the Interactive Media Entertainment & Gaming Association. “Here’s how I react to it [the attempt to confiscate media domains]. Governor Beshear needs to read the Constitution,” he added.
Leyden pointed out to the Associated Press news agency that the Governor’s action could be interpreted as an unprecedented attempt to limit competition in what should be a free marketplace. He used the Kentucky lottery and the Internet-based Twin Spires.com horserace betting operation in the state as examples of Internet gambling that operate with impunity, an inequity justified by state officials as allowed by federal law and regulated as online parimutuel wagering.
“I guess the perception is it’s just out of staters and it’s just people who aren’t here in Kentucky, and then it’s a free ride,” said Leyden.
John Pappas of the PPA told the AP that his group initially supported Governor Beshear’s election due to his pro-gambling stance — the Governor has been a supporter of more land casino facilities in the state. In the current issue, the governor has been quoted as saying that part of his motivation is to protect the state’s gambling interests.
“Unlike casinos that operate on land or on riverboats in the United States, these operations pay no tax revenues, provide no jobs, and yield no tourism benefits,” Beshear is reported to have said, referring to online gambling operators as “leeches on our communities.”
Following the current moves, however, the PPA had a new message for the governor: “We would welcome any proposal for you to regulate and tax online poker. And in fact if you move forward with your casino plans and they don’t include a regulation and taxing for online poker, we will oppose those casino plans because of your position against our pastime,” said Pappas.
Joe Brennan Jr., chairman of the Internet Media Entertainment & Gaming Association, reiterated the claim that the state of Kentucky was indulging in commercial protectionism: “These are things that should trouble all Americans because this was all done in an effort to take out the competition,” Brennan said.
“If this is allowed to stand, it will affect the entire Internet,” Brennan stressed. “This can metastasize to other states. What the Governor has done is employed the ultimate weapon, a means of eliminating competition.”
At Monday’s discussion, he also criticised the governor’s use of outside counsel and the covert manner in which the action has been initiated.
Jeremiah Johnston, a spokesman for the Washington D.C.-based Internet Commerce Association, told WZTV that Kentucky is exceeding its authority and jurisdiction in what should be a federal interstate commerce issue. Legal precedent set by the case could have a “chilling effect” on Internet businesses.
“If all of a sudden your company pops up on the radar in some state and they can just take your address, it’s like someone swooping down onto Main Street and taking your building,” Johnston told Associated Press. “You’re out of business.”
The Louisville Courier newspaper carried a cartoon lampooning Governor Beshear as a Napoleon-like dictator attempting to control the Internet. Domain Name Wire published a statement against the Kentucky action, saying: “It’s rather unsettling that the governor of one of the fifty U.S. states can decide to seize domain names, and all he needs to do is find one elected judge to say ‘yeah, let’s do this’.
“Scarier still is that the domain owners didn’t really have any warning. The order was to seize the domain names first, then talk through the details later. At that point much of the damage has been done.”
Today’s Kentucky update, from the CAP Newswire:
A morning of legal argument closes with no decision on Kentucky’s attempt to hijack domain names
October 7, 2008 (InfoPowa News) — Tuesday morning saw a significant turnout of legal representatives in the Frankfort Circuit Court, prepared to argue their position before Judge Thomas Wingate regarding the attempt last week by the state of Kentucky to seize 141 international domain names belonging to online gambling operations.
The legal teams, representing domain owners, registrars and civic organizations concerned about the impact of Kentucky’s actions on freedom of speech and the Internet, had earlier submitted legal briefs during a 7-day continuance granted by Judge Wingate.
First up was the legal representative for a number of online gambling companies and domain owners, Bill Johnson, who delivered an articulate and cogent argument that Kentucky state officials had acted covertly and without giving the state legislature its right to review their initiative.
Johnson gave a factual summary of events to date and claimed that correct public policy was not followed, resulting in an issue where the state and its lawyers were asking the judiciary to legislate, contrary to the law and to public practice.
Lawyers for the Internet Gaming Council surmised that Kentucky officials were trying to hold domain owners for ransom, a reference to earlier comments by the state that its intention in launching the action to seize domains was aimed at getting owners to come forward and agree to block Kentucky players … and pay a fine for offering their products in the state.
The court was given the benefit of an expert description of how domains work, and the arbitrary definition by lawyers for the state of domains as “gambling devices” in terms of Kentucky laws was disputed. Counsel revealed that a mere handful of registrars were actually complying with the court’s order to hand over domain certificates, and pointed out that the certificate is of limited practical value in halting operational conduct as the website and IP address remain outside the control of the certificate holder.
The representative pointed out that the requirements of due process had not been satisfied in the action, with domain owners denied proper notification by the state’s servants. The potential for future and wider abuse of the Internet if a decision favouring Kentucky’s action was given was emphasized.
iMEGA counsel addressed the definition of “gaming device”, suggesting that it was limited to the mechanical gambling devices envisaged by the legislation. No specific updates to the law regarding domains or their inclusion in the “devices” definition had been implemented.
Counsel from the high-powered Greenberg Traurig legal firm claimed that the action was flawed because online gambling is not implicitly illegal in the state of Kentucky.
Respected legal expert and author Lawrence Walters said he represented Golden Palace Casino and Golden Casino, whose domains had been impacted by the Kentucky action. He raised questions regarding the use by the state of outside lawyers on a contingency basis, claiming that the state attorney general had not been involved in the process. None of the domain registrars were located in Kentucky, and the action by state officials therefore lacked jurisdiction.
iMEGA’s Edward Leyden raised the Constitutional issues inherent in the action, specifically the commerce clause in relation to the global nature of Internet business and activity, which was recognized by the U.S. Supreme Court. He argued that individual states may not regulate commerce, especially in the foreign commerce sense, an argument that had prevailed in precedents.
In the issue before the court, there had been an attempt to initiate an enforcement measure on entities that were located outside the jurisdiction of the state of Kentucky, and therefore Kentucky does not have the authority to regulate or confiscate domains. In addition, he asserted, the confiscation sought by the state could have the effect of impacting the business activities of individuals in wider jurisdictions where the business concerned was within the law and policies of the governments concerned.
The iMEGA representative said that the Kentucky action is unusual and unprecedented, and went on to question the legal Internet betting taking place on the Kentucky-domiciled Twin Spires.com horseracing website. This raised questions of equity in a state where all forms of gambling had not been banned as was the case in Utah, and this again brought into play the commerce clause of the Constitution, which expressly prohibits states from engaging in commercial protectionism through discriminatory practices.
The time had come to dispel the false notion that the owners of the domains were renegades and criminals, he said, pointing out that the domain owner entities were companies that paid taxes, followed rules, and were largely regulated by other jurisdictions. Some are publicly listed companies on leading stock exchanges in countries generally accepted as allies of the United States such as the United Kingdom, he said before concluding that the consequences of the Kentucky initiative could be far reaching and disastrous to commerce.
Presenting the Commonwealth of Kentucky argument in support of the action, Chicago lawyer Robert Foote reprised his contention that none of the opponents of the state in this matter had legal standing. None of the domain owners had presented themselves, instead relying on legal surrogates, he said, claiming that the reason for this was fear of cross examination on their revenues and the knowledge that offering online gambling to Kentucky residents was wrong.
He drew the court’s attention to the fact that not one domain owner was personally present, pointing out that one lawyer was representing an unidentified registrar, another was speaking for seven domain owners, and iMEGA for 58 owners. Other legal representatives arguing their cases had declined to identify their clients.
Foote went on to inform the court that the registrar for one online poker site had been directed by the domain owner not to comply with the court’s order for certificates to be lodged with the court pending the outcome of the case. This was in defiance of the court’s order. In another case, a registrar had advised that they would lift their lock on certain frozen domain names due to a conviction that the state of Kentucky had no right to force a confiscation. Foote asked how registrars could be persuaded to cooperate.
The Commonwealth’s representative pointed to precedents in domain actions, citing the California 9th Circuit Court ruling that a domain name is property that can be seized, and a court decision in the state of Washington involving the Bodog domains, ordered in default to be confiscated in an action with First Technology. Foot also drew attention to enforcement practice in cocaine prosecutions, where seizures are only announced after the fact — clearly an answer to the arguments that domain owners were denied notice of the state’s intentions.
Kentucky’s intention was to gain possession of the domains, thus forcing the owners into discussions leading to two goals — blocking Kentucky residents from their websites, and paying a fine to the state, he said, emphasizing that online gambling is clearly regarded as illegal by the U.S. federal authorities.
His statement that Kentucky was not trying to regulate free speech triggered a question from Judge Wingate regarding prohibition of advertising, to which Foote responded by saying that online gambling companies used the .net alternative site subterfuge to advertise, and this would not be affected by the confiscation of the .com domains.
By lunchtime, the arguments had been heard and Judge Wingate advised that he would need a further seven days to consider his judgment.
