As we previously reported, the State of Kentucky, specifically Kentucky Governor Steve Beshear, has determined that domain names are "gambling devices" under the meaning of the laws of that state, and has recently ordered the seizure of 141 domain namesas some of you may have heard. While you may lawfully marry your own cousin in the Bluegrass State, it is illegal to operate a gambling device. Go figure! What is even more mind boggling is the fact that some of these domains are simply parked domains not even taking bets.
An official hearing will be held tomorrow, September 26th between the State of Kentucky and lawyers representing interested parties, such as Sedo.com and the Gambling Association.
This type of behavior confirms that you might want to consider moving your domains to a registrar outside of the US, as this order is to the registrars of the domains, not the central registry. A registrar we have been recommending to safeguard your domain names from US litigation and lower your tax burden is EuroDNS in Luxembourg, Europe.
Any registrar receiving the seizure order outside of the State of Kentucky should carefully consider whether the Governor of that state exercises appropriate jurisdiction over domain names registered through that registrar. If you are willing to concede jurisdiction over all of your customer's names to the State of Kentucky, this may come as a surprise to many of your customers, regardless of how attractive their cousins may be.
While the current order relates to 141 domain names chosen on a basis which is not explained in the order, it is rumored that there may be more than 141 domain names being used for purposes that might not be legal in Kentucky, and if successful, they will certainly be back for more if they are successful in this effort to assert global authority over domain names no matter where registered or used. Such purposes would include not only gambling, but any other activity deemed illegal in Kentucky, such as artificial insemination of thoroughbred horses.
It is scary to think what this precedent may spark in the future. We will keep you informed as this story develops. In response to these developments, Jeremiah Johnston, President the ICA, the official domain industry association, issued the following statement yesterday:
"The Internet Commerce Association is aware of the extreme concern of ICA members regarding the action of Kentucky Governor Steve Beshear ordering the seizure of 141 gaming related domain names. It appears that there may be no statutory basis for this unprecedented action, that Kentucky may lack sufficient jurisdictional grounds and that it also may violate the Commerce Clause of the US Constitution.
The ICA intends to immediately investigate this matter, including outreach to affected ICA members as well as to those registrars subject to the Kentucky order. Once we have gathered additional information, the Board will consider further appropriate action to confront this dangerous precedent.
ICA initially stated incorrectly that this seizure order was initiated by the Kentucky Attorney General. I received this statement from the Kentucky Attorney General's office. "The initiative was taken by Kentucky Governor Steve Beshear. The Attorney General's Office has no involvement in the seizure of the gaming domain names."
ICA Contact: Michael Collins +1. 202 657 4570 or +1. 407 242 9009 mobile
Source: DomainNews.com on September 25th, 2008 - Posted by Roland G. Buck - Chief Editor Chief Editor