Online Gambling Sector Awaits Kentucky Decision

Written by:
C Costigan
Published on:
Sep/25/2008

A group of lawyers have descended upon the commonwealth of Kentucky Thursday morning to block efforts by that state's Governor, Governor Steve Beshear, in seizing up to 141 domain names. Among those in attendance at a Thursday hearing, The Interactive Media Entertainment & Gaming Association President, Edward Leyden.

"In exercising this standing, iMEGA has assembled what may be one of the most talented, experienced, and certainly well-respected white-collar defense teams in the country, BAR NONE.," Leyden reassured. "In short, we provide individuals and companies that may be affected by this Kentucky action with the highest quality of legal representation that is second to none while, at the same time, the opportunity to remain anonymous by letting iMEGA be the face before the court--which is precisely what associational standing is meant to accomplish."

Dinsmore & Shohl LLP will be appearing on behalf of the industry. Jon L. Fleischaker will be representing the matter.  iMEGA was previously working with another law firm but due to a conflict of interest, selected Dinsmore & Shohl, which is considered the most prestigious law firm in the commonwealth. 

Fleischaker is Chair of the Communications and Media Law Practice Group. Jon is the Managing Partner for the Louisville Office and he serves on the Management Council. Jon has more than 30 years of experience in media law and First Amendment cases, actively involved in representation of newspapers and broadcasters dealing with publication issues. He has been the most visible attorney in Kentucky in dealing with First Amendment concerns. Jon also has extensive employment litigation experience, including class actions and individual cases. In addition to numerous appellate cases, he also has participated in 99 cases in the U.S. District Courts.

The Poker Players Alliance - a million plus member strong organization representing online poker interests - also said it planned to have legal counsel present at Thursday's hearing.

Kentucky received court permission to seize 141 gambling Web sites' domain names as it tries to put them out of business there. Gov. Steve Beshear (D) said at a press conference that the gambling-friendly state is taking "unprecedented action" against sites that "siphon off money from regulated and legal games," such as the state lottery and thoroughbred racing. Kentucky has lost "tens of millions" to unlicensed gambling, he said. Franklin

County Judge Thomas Wingate ordered the domains transferred to Kentucky, "an important first step" in keeping Kentuckians from accessing the sites and forcing sites to pay damages, Beshear said.

The state's Justice and Public Safety Cabinet had asked the court to force sites simply to bar access to Kentucky users, a practice common in Communist China, and if not, to hand over the domain names, according to a written statement.

Beshear has even made the outlandish claim that online gambling funds terrorism, something that has never remotely been proven.

A spokesperson for a spokeswoman for the state cabinet that filed the suit told the Washington Internet Daily that the court order has been served on domain registrars, but doesn't require the registrars to pull the plug on the sites. Kentucky doesn't anticipate any challenges from registrars who say the state is circumventing ICANN policy, she said, since registrars must follow valid court orders under registration agreements.

But already this week a handful of the 141 online gambling domains were turning up under the administrative umbrella of Kentucky's government.

Doleplex Holdings has lost two of its online casino domain names to the state of Kentucky in a seizure. HighRollersLounge.com was transferred over to the commonwealth on Tuesday. Earlier in the day, LuckyPyramidCasino.com was taken over as well. Both are connected with Crystalisle Management Ltd and the more well known Crystal Palace Casino, which was also off line.

But it was unclear if those domain names were voluntarily handed over or otherwise seized. Doleplex Holdings head, Warren Cloud, passed away suddenly from a heart attack this summer and his online casino group was said to have gone off line soon thereafter.

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Christopher Costigan, Gambling911.com Publisher

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