Kentucky (secretly) commandeers world's most popular gambling sites

By Dan Goodin in San Francisco for The Register. This story has been reproduced with permission.

The order (PDF) by Franklin County Circuit Judge Thomas Wingate applies to sites including absolutepoker.com, goldenpalace.com, and ultimatebet.com. The websites, many of which are operated outside US borders, stand accused of illegally making their services available to Kentucky citizens. Already, whois records list goldencasino.com as the rightful property of J. Michael Brown, the Justice and Public Safety secretary who filed the lawsuit. At time of writing, goldencasino.com and the handful of other affected websites we checked appeared to be offering unfettered online gambling services.

The episode is the latest reminder of the hazards that can visit firms that do business on the internet, a borderless marketplace where controversial content or services are subject to the most restrictive or repressive territory's rules and mores. In years past, states such as Missouri have also succeeded in shutting down online casinos even though they had no clear nexus to the state. And in 2003, the US Department of Justice wrestled away the rights to ISOnews.com after it posted information on pirated software and hardware.

We're not sure what the difference is between a state like Kentucky reaching half way across the globe to shut down a gambling site and, say, a government like China's trying to silence websites that violate laws forbidding dissent policies toward Tibet. Think the comparison is extreme? Then consider this: In patting himself on the back for taking action against the websites, Brown waxed hyperbolic on the perils of online gambling, saying here it is "tantamount to a virtual home invasion."

We're not the only ones made uncomfortable by the action.

"I'm nervous about the fact we have these very loose norms of when activity taken outside of a state is causing harm in a state," said Eric Goldman, a professor of law and Santa Clara University. "We're way too inclusive in punishing people for out-of-state behavior."

According to this article from Gambling911, the state's motion to seize control of the domain names was filed under seal and a separate hearing originally scheduled for Thursday was to take place behind closed doors. The hearing, which concerns the forfeiture of the domain names, has been rescheduled for Friday afternoon.

A spokeswoman for Beshear's office couldn't say whether the action was filed under seal or whether the hearing would be open to the public.

© The Register 2008