Governor of Kentucky’s drastic step to seize domain names may backfire.
Beshear: Public Enemy #1
I haven’t written about what’s going on in Kentucky yet. Frankly, I was so dumbfounded by Kentucky Governor Steve Beshear’s action to seize online gambling domain names that I didn’t know what to write.
Yesterday I got a call from a reporter for The Courier-Journal and I spent about a half hour talking through the issues with her. (You can see her article here.) This helped me clear my thoughts and think about what this really means for the domain industry, and what it really means for Beshear.
Bottom line: scary for the domain industry, scarier for Beshear.
Scary for the domain industry
It’s rather unsettling that the governor of one of the 50 U.S. states can decide to seize domain names, and all he needs to do is find one elected judge to say “yeah, let’s do this”. Scarier still is that the domain owners didn’t really have any warning. The order was to seize the domains first, then talk through the details later. At that point much of the damage has been done.
To be sure, the governor didn’t just pick an industry and seize the domains. He cited Kentucky law that allows the state to seize instruments used in illegal gambling. I’m sure this law was never intended for online gambling, but you get the point. But that doesn’t mean this isn’t a slippery slope. And it doesn’t help that the only reason he went after online gambling was to prop up his states’ industries. What’s next, the governor of Michigan banning foreign cars?
Further, it appears there wasn’t much thought into selecting the domains that should be seized. I’ve been told that the state named web sites if it was able to login and create an account on them. If this was the threshold for calling out a casino, it’s rather weak. Most of these sites offer play money gambling, and they may not even accept your money if you’re in the U.S. Credit card companies block casino transactions, so that would mean sending a check or wire transfer. I doubt the government went through that pain. One of the domain names – IndianCasino.com – isn’t actually a casino web site. It just forwards to one.
Scarier for Governer Beshear
I think Beshear has bitten off more than he can chew. He has drastically underestimated the forces he’s dealing with, and probably thinks it’s limited to offshore casinos. He’s wrong. Here are some of the groups that will make Beshear pay:
Free speech advocates. I’m sure the Electronic Frontier Foundation won’t be happy about the precedent. It wasn’t happy about the Snowe Bill, either.
Adult entertainment industry. If anyone should be worried about what’s next, it’s online operators of adult entertainment. I’m sure Beshear wants to protect his state’s strip clubs, too. If not him, some other conservative governor could take this step.
Domain industry. We’re small but impactful.
His constituents. I got the impression from talking to the reporter yesterday that people in Kentucky like to be left alone. They don’t like the government telling them what to do. Even those law abiding citizens who don’t gamble online won’t like their government spending millions of dollars of taxpayers’ money to see this challenge through.
Lawyers for the online casinos will convene for a hearing in Kentucky this afternoon.