The Kentucky Court of Appeals today granted petitions by the Interactive Gaming Council (IGC) Interactive Media Entertainment and Gaming Association, Inc. (iMEGA) to overturn an earlier trial court ruling authorizing the seizure of domain names owned by operators of overseas gambling websites. While challenged on several additional fronts -- including on a wide range of Constitutional grounds by EFF and its fellow amici the ACLU of Kentucky and the Center for Democracy and Technology (CDT) -- the Court overturned the prior ruling based on an interpretation of Kentucky's "gambling device" forfeiture statute:

[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."

The Court of Appeals suggests that the Kentucky legislature might be able to amend the statute (KRS 528.010) to cover domain names, but even if it did, the Commonwealth would likely still be out of luck. In addition to this type of domain name seizure still raising serious First Amendment, due process, and other constitutional problems, Kentucky courts (as pointed out in our joint amicus brief) also lack the authority to directly order out-of-state registrars to turn over customer domain names.

Update: The Commonwealth of Kentucky filed a notice of appeal with the Kentucky Supreme Court on January 21, 2009.