The Kentucky Supreme Court will now either throw the state's case out and support the iMEGA-positive decision of a three judge panel in the Kentucky appeals court, or will perpetuate an already expensive and drawn out legal process by deciding for the state or ordering further arguments be submitted.
The case has its roots in the covert seizure by a Kentucky lower court judge last year of 141 international domain names belonging to online gambling firms domiciled outside the bluegrass state. The seizure was an attempt by the state governor, using outsourced lawyers on a contingency payment basis, to destroy online gambling competition to the state's interests in land and internet gambling on horseracing, with the possibility of claiming monetary damages mentioned by state government spokesmen as well.
The action was strongly attacked by legal teams from iMEGA and the IGC in an appeal case that attracted worldwide attention and exposed the threat to the freedom of the Internet and US Constitutional standards which the Kentucky initiative constituted.
The appeal was successful, and the seizure order set aside. Almost immediately, and again using outsourced, contingency-compensated lawyers, the governor of Kentucky, Steve Beshear, launched an appeal against the appeal, which is the current action now being considered by the Kentucky Supreme Court.
This week, attorneys representing Kentucky Justice and Public Safety Cabinet Secretary J. Michael Brown filed a 20 page response brief to iMEGA's earlier submission to the Court. In procedural terms it appears that the Kentucky lawyers screwed up and missed the deadline for their submission, which was June 17th. Although the court accepted the submission, it required the Beshear legal team to file a Motion for Enlargement explaining the one day delay.
The motion blamed the complicated nature of the action, saying:: “In this action, ten separate parties have sought to participate in this litigation as amicus curaie parties, with many such motions still pending, and numerous parties currently litigating this case as Appellees.” The Commonwealth's lawyers added that the deadline had been miscalculated.
Judging by the state's current arguments, the issue is set to become even more complex, with debate regarding the right of Cabinet Secretary Brown to bring a civil suit against the owners of the previously seized domains, and whether Kentucky can institute a civil action to prosecute a criminal illegal gambling charge. The original grounds for seizure of the domains were, however, based on criminal law. The question of whether the lower court ordering the seizures had jurisdiction to do so is also argued again.
Both parties, and indeed the industry as a whole, now await the Court's finding.
While this persecution of the online gambling industry has been ongoing, Governor Beshear has somewhat hypocritically been pushing for an expansion of land gambling in his state, and after weeks of political manouevring and debate in the state legislature he appears to be within striking distance of his objectives.
Business Week reports that gamblers at Kentucky race tracks could soon be able to put their money on more than horses under a measure that's made it halfway through the state legislature and now awaits only Senate approval and the governor's imprimatur.
House lawmakers approved Beshear's legislation Friday that would allow Kentucky's tracks to install video gambling terminals offering casino-style games like slots and poker.
Beshear had earlier called lawmakers into a special session of the House to address a projected $1 billion budget deficit. He included the gambling proposal on the agenda, saying it could generate about $300 million a year for state coffers, a portion of which will be used to leverage construction bonds to pay for some $1.1 billion worth of school upgrades.
The measure, which passed 52-45 after some four hours of debate, has been touted as a means to bolster a struggling horse racing industry and to stimulate the state's faltering economy with additional construction money.
The proposal could run into trouble at Senate level, however.
Senate President David Williams said the legislation lacks the support it needs to pass in his chamber, and he is offering a proposal to funnel money to the state's horse tracks through a surcharge on lottery ticket sales in the state instead. It was unclear Friday whether the measure passed by the House will even be called for a vote in the Senate, though it's sponsor, House Speaker Greg Stumbo, joined the governor in calling for one.
Anti-gambling groups contend backers of Beshear's measure "bought votes" from lawmakers with promises of school construction projects in their districts.
"Today, we saw political corruption at its finest," said David Edmunds, a policy analyst for the Kentucky Family Foundation, a Lexington-based group that opposed the measure. "We know that school construction jobs were held over the heads of legislators who normally would not vote for this measure."
One Senator said the proposal would not pass the Senate, saying baldly: "You can already stick a fork in it - it's done!"
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