A number of British based online gambling sites are sweating today after news that some of the biggest and most controversial companies in the industry could be stripped of their internet domain names.
The worrying news comes after state officials in Kentucky won a seizure order from a US court.
The order has been served on domain name registrars for 141 gambling sites that take custom from US players, despite this bring prohibited by Kentucky law and the 2003 Unlawful Internet Gambling Enforcement Act (UIGEA).
Two British sites, namely PokerStars and Full Tilt have been targeted and theoretically may have their domain names confiscated.
PokerStars and Full Tilt have dominated the online poker industry since UIGEA became law, prompting most other operators – such as London-listed firms PartyGaming, 888 and Sportingbet – to exit the US almost overnight.
But with no assets or operations in the US, it remains difficult for the American authorities to monitor or police the US activities of remaining operators.
Nick Wood, managing director of London-based Com Laude, which holds the domain name for PokerStars, said: "We anticipated this could happen and we've developed an action plan which largely consists of us not responding." Milton Keynes-based Safenames, the registrar for Full Tilt, declined to comment.
PokerStars and others are believed to be preparing to send a team of lawyers to Kentucky to fight the legal claim, which is being backed by governor Steve Beshear. They are expected to argue the Kentucky courts have no jurisdiction over dotcom domain names registered overseas. Insiders believe they will side-step arguments about whether or not taking cash from US players is in breach of US law.
In a statement welcoming the order, Governor Beshear said: "The owners and operators of these illegal sites prey on Kentucky citizens, including our youth, and deprive the Commonwealth of millions of dollars in revenue. It's an underworld wrought with scams and schemes." He described them as "leeches on our communities".
He conceded the action was in part designed to protect the interests of local horseracing-related gambling. Beshear has campaigned for more casinos to be licensed in Kentucky, prompting some critics to suggest his attacks on online operators looks morally inconsistent.
Many industry experts suggested the Kentucky action was unlikely to succeed. "This is a stunt," said a Washington attorney, David Stewart.
Last year, online gaming group Bodog lost control of its domain name, which was registered in the US, after a legal dispute. The company quickly resurfaced with a similar name but is believed to have lost significant business as a result.
