Churchill Downer: Kentucky goes from Horse Racing to Seizing Domain Names
Posted October 10th, 2008
Kentucky Governor Steve Beshear won his office largely on a platform of bringing gambling revenues into his impoverished state (KY ranks in the bottom 5 states for per capita income). To make sure that no such proceeds escape the Bluegrass State, Beshear has ordered the seizure of 141 gambling sites on the grounds that they were illegally drawing tax revenue away from the Commonwealth. Never mind that none of the businesses which own the URL registrations are based in Kentucky. The Washington Post quoted Bret Fausett, a domain name expert and attorney with the Los Angeles law firm Adorno, Yoss, Alvarado & Smith as stating, “This is a little bit like if the Home Shopping TV network was accused of fraud, and Kentucky decided to seize the show’s cameras and set even though HSN’s real location is nowhere near the state.”
At this writing, Kentucky circuit court judge Thomas Wingate is considering arguments against this same seizure which he himself ordered at the governor’s behest. The state is going even further, preparing a lawsuit to collect millions of dollars in funds they perceive as having been siphoned away from potential revenue in taxes. In some circles, this action is seen as bizarre, unconstitutional, and dangerous. The same WaPo article sites Michael Collins, executive director of the Internet Commerce Association as arguing in a hearing this past week, “What’s to keep Iran or China from doing the same thing? Yet, even China - which tries very hard to control the Internet its citizens use – hasn’t tried to do what Kentucky is trying to do here.”
Similar legal actions come to mind, such as when the property of suspected drug dealers are taken and sold off at auctions. But while many gambling sites may be shady, none of domain names seized belonged to any illegal businesses. To be fair, Kentucky is arguing that the sites amount to “gambling devices” and are thus subject to seizure under current state gambling statutes. The irony is that Beshear won the office in 2007 largely due to his stance on gambling, as proclaimed on his own campaign website: “As Kentucky’s next Governor, I will work with the House and Senate to place a constitutional amendment on the ballot which would allow expanded gaming in Kentucky. It is time that the people be allowed to vote on whether they want expanded gaming in our state and the resulting economic benefits that it will provide.”
Whatever the governor’s motives are, the problem is the precedent this action would make should it stand on appeal. Think of the possible scenarios. Utah shuts down JackDaniels.com because they don’t conform to that state’s arcane alcohol laws. A small community in Florida seizes Hustler.com citing local obscenity statutes. Or how about Saudi Arabia forces ICANN to transfer Match.com because Sharia law forbids women to show themselves unveiled to strange men? It all might sound crazy, but anybody doing business on the web – and that’s just about everybodydoing business these days – needs to pay close attention to the outcome of this case.
Tags: Kentucky Decision, Kentucky Governor, seized domain names, Steve Beshear
Posted in Uncategorized by Miguel Cima
