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DOJ Doubts Kentucky's Constitutional Standing to Seize Names

Added on: Feb. 2, 2013

The story about the attempted seizure of 141 gambling-related domains from online gambling operators by the state of Kentucky (in particular Gov. Steve Beshear) has been a very complicated one, and has taken many turn, but one very important development in the matter took place in July of 2012.

The United States Department of Justice was involved in trying to sort out the whole situation regarding Full Tilt Poker, one of the companies that was busted as part of the infamous "Black Friday" proceedings by the DOJ (April 2011), and its merger with (or sale to) PokerStars. This was a matter the DOJ was anxious to clear up, because it involved the reimbursement of funds that players had on account with Full Tilt that had not been paid. Of course, as part of this deal, a very material issue surrounded the assets of Full Tilt, which included the domain name. More importantly, when the Feds got involved in the case, THEY seized names, and they took the position that while they had the authority to do so, Kentucky did not have similar authority. There were also names that were owned by PokerStars and Absolute Poker that were part of the Black Friday seizures.

Well, a motion was filed by the USDOJ in Southern District relative to the matter of United States v. PokerStars, et. al, in which it stated that the seizures themselves "lacked constitutional standing," that they had not obtained a judgment for the domain names, and that they have no possible ownership interest in such domains.

The previous month, some operators had been called before Judge Thomas Wingate in a Kentucky circuit court, under the threat of losing their .com names. The issue that was most important was whether some of the sites had undertaken steps to block Kentucky residents from playing their offerings. Some had, most hadn't, but also many argued that they had but were denied that by this judge. Kentucky filed a claim on these names (well, 132 of them anyway) in federal court in September 2011. And Wingate had signed a forfeiture order. This forfeiture order did not include the aforementioned poker-related sites and others who were involved in the DOJ actions that were directly related to Black Friday.

This matter continues to move forward, and is being watched not only by people involved in the gaming industry, but also by free speech advocates.