iGaming Litigation

When the state of Kentucky tried to seize the domain names of 141 internet gambling sites, alleging they were in violation of its gambling laws, the Interactive Gaming Council hired Ifrah Law to represent 61 impacted owners. The state’s suit was the first of its kind anywhere and threatened severe consequences for both Internet commerce and civil liberties.

Ifrah Law persuaded the Kentucky Court of Appeals that the judge ordering the seizure had exceeded his jurisdiction and that the seizures should be blocked.

On appeal, we continued to fight the forfeiture over such novel legal questions as whether a domain name can be considered a gambling device or property subject to seizure.

The Supreme Court ruled that the case was not properly before it due to a legal technicality, and the litigation was eventually abandoned by the plaintiff’s lawyers.

When the U.S. government seizes assets and funds, they are rarely predisposed to give any back. But in this case against a payment processing company—from which federal authorities in Maryland seized over $2 million of allegedly illegal proceeds in connection with an investigation of illegal sports betting –Ifrah Law helped its client get half of it back.

The Department of Justice was very aggressive in seizing the payment processor’s assets in California, claiming it was a front for the gambling industry. Our precise forensic investigation demonstrated that over 50 percent of our client’s proceeds came from legal, legitimate sources, and that the scope of the seizure was overly broad.

The result was the first settlement on record where the Department of Justice agreed to refund over $1 million of proceeds initially represented to the Court as illegal.

PokerStars turned to Ifrah Law to defend it against an attempted class action filed under the Illinois Loss Recovery Act in the plaintiff-friendly Southern District, where individuals can seek to collect losses on behalf of third parties that fail to make their own claims within six months of losing their wagers. The case posed the risk of a multi-million dollar hit to PokerStars, and could open the door for related class actions against online poker operators.

We successfully argued that PokerStars was not liable because it serves as a third party service provider— it only provides the forum for others to play and lacks a stake in the outcome.

The decision closed the door on future class actions against PokerStars, and provides precedent for other class actions that may arise against online gaming operators under loss recovery statutes.