A Kentucky court order authorizing the seizure of 141 overseas domains has been overturned by the the Kentucky Court of Appeals. The court ruled that the domain names, all related to online gambling, do not fall under the state's definition of a "gambling device," and therefore they cannot be seized under that statute.

The original ruling came down in September of 2008 when a Franklin County Circuit judge issued an order giving the Commonwealth of Kentucky permission to seize control of some 141 illegal online gambling domains. The court claimed that the state had the authorization to seize unlicensed and unauthorized "gambling devices," and that Internet domains fell under that definition. In order to regain control of their domains, site owners would either have to implement software to block Kentucky residents, or risk forfeiting their businesses.

Around the same time as the ruling, Kentucky Governor Steve Beshear (who, incidentally, is the one who filed the lawsuit) described Internet gambling sites as "a tremendous threat to the citizens of the commonwealth because of its ease, availability and anonymity." What he didn't point out is that it's a much larger threat to the state's heralded horse-racing industry.

Two of the affected websites immediately appealed the decision, with the Electronic Frontier Foundation, ACLU, and the Center for Democracy and Technology joining them soon thereafter with an amicus brief to argue that the initial seizure ruling was flawed. The organizations argued that the registrars that handle the domains aren't based in Kentucky and that the state hadn't demonstrated jurisdiction over them. They also pointed out that the ruling would allow Kentucky to effectively control commerce in other states and nations, which goes beyond the Constitution.

Finally, the organizations emphasized that the ruling could "chill" speech of all types. "If the Kentucky order is upheld, no speech that conflicts with any law, anywhere in the world, would be safe from censorship," stated the CDT's John Morris. "Just as Kentucky is trying to take down sites located around the world, any government seeking to stifle free expression could try to interfere with lawful speech hosted in the United States."

The Court of Appeals, however, decided to overturn the decision based on a fairly simple argument. "[I]t stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute a "machine or any mechanical or other device... designed and manufactured primarily for use in connection with gambling," reads the order.

The state of Kentucky has a vested interest in barring online gambling sites from being accessible there, as the state's own revenue is highly dependent upon certain sanctioned (and therefore taxable) forms of gambling, such as the aforementioned horse races. Because of this, it seems likely that Beshear will look for other ways to attack gambling sites and ultimately take them down—this could be done, for example, by amending the state's gambling statute to include domain names. The EFF notes, however, that even if the Kentucky legislature were to do this—an idea that is entertained in the Appeals Court order—it would still run into trouble attempting to seize those from outside the state because of lack of jurisdiction and First Amendment concerns.

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