A bit of a surprise ruling in Kentucy

Industry representatives found not to have standing

The appeal over an appeal by the state of Kentucky to the state Supreme Court has had an unexpected result - on the legal technicality of whether iMEGA and the IGC had standing to pursue the state after it tried to seize and confiscate 141 international Internet gambling domain names, the bench ruled that they did not.

Most observers felt that the case would be a slam-dunk for the industry due to the powerful arguments put forward by iMEGA and IGC regarding the definition of "gambling device" and the question of the limits of Kentucky jurisdiction, but these factors appeared to take second place to the whole question of legal standing.

Instead, the bench only briefly discussed these salient points before ruling: “Although all such arguments may have merit, none can even be considered unless presented by a party with standing. No such party has appeared at the original proceedings in Franklin Circuit Court, the writ petition at the Court of Appeals, or on the appeal here to this Court.”

The full ruling can be read here: http://www.imega.org/wp-content/uploads/2010/03/2009-sc-000043-mr.pdf

Commenting on the court's finding, which overturned an earlier court of appeals ruling in favour of iMEGA and the IGC, Joe Brennan, chairman of iMEGA said: “In the written decision, the Court clearly indicates they agree with our arguments and are inviting us to re-file so that the technicality of the standing issue can be resolved.

"It’s unfortunate, but I can’t imagine that Kentucky’s lawyers will celebrate a ruling that says, ‘Bring us an owner so we can rule in your favor,’”Brennan said.

The Supreme Court noted that the IGC and iMEGA lacked standing, because neither trade organisation had disclosed its membership details.

“In fact, nothing is known about their members, other than their attorneys' vague assertions they represented ‘some’ of the registrants,” the learned judges found. “Through their unwillingness to identify any of their members, iMEGA and IGC failed to meet this burden. As such, iMEGA and IGC lack standing and, therefore, their writ petition should have been denied.”

Five of the 141 domain names - PlayersOnly.com, Sportsbook.com, SportsInteraction.com, MySportsbook.com, and Linesmaker.com – were represented by legal counsel in Kentucky. However, the state Supreme Court pointed out: “Just as with real property, a domain name cannot own itself; it must be owned by a person or legally recognized entity.” That, apparently, places at risk the writ of prohibition and once again could open domain owners to the possibility of seizure and confiscation.

In this regard the Supreme Court returned the matter to the lower court of appeals where the prohibition issue may again be addressed.

iMEGA notes that it now has 20 days to re-file with the Kentucky Court of Appeals and the case may immediately make its way back to the state Supreme Court. iMEGA has already asserted that it will "quickly file a motion to satisfy the Court.” Brennan said that his organisation would probably only need to specify one of its members as a party at risk in order to meet the requirement for organisational standing.

“We can make a motion at the Court of Appeals to move the case back to the Supreme Court. The Supreme Court indicated that they’d hear it.” No further oral arguments or briefings would be required if standing is met.

Chief Justice John Minton, Justice Lisabeth Hughes Abramson, Justice Wil Schroder, and Justice Daniel J. Venters all concurred with the ruling, while Chief Justice Will T. Scott concurred in “result only.”

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