It has been a long fight between Kentucky and PokerStars. The decade-long case might finally see its end following the Kentucky Supreme Court ruling in favor of the state. In 2018, the Kentucky Court of Appeals overturned an $870 million judgment against PokerStars by the Franklin Circuit Court in 2015. However, the Supreme Court reinstated the Franklin Circuit Court ruling, bringing to an end the long fight against illegal offshore internet gambling.
Following the US federal government Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, the state filed a suit against PokerStars for actions it took between 2006 and 2011. The then Kentucky Justice and Public Safety Cabinet, J Micheal Brown, filed the lawsuit in 2010 for $290 million. The accusation was that PokerStars was operating inside the borders of the state and that about $300 million was lost by the 34,000 residents who registered and deposited with the site.
Kentucky Finally Comes Out Victorious
The 2015 ruling by Judge Thomas Wingate at the Franklin Circuit Court ordered the poker site to pay $870 million in damages after the state requested the amount of the original lawsuit be tripled. However, The Stars Group, which owned the site proceeded to the Court of Appeals to appeal the ruling. The Court of Appeals ruled in favor of The Stars Group on the basis that the state itself is not in a position to sue on behalf of its citizens even as anyone can sue “winners” to recover lost wages in a game of chance.
The state was having none of it and decided to re-appeal the case, this time, at the Supreme Court. After two years of evaluation and re-evaluation, the Supreme Court agreed with the ruling of Judge Thomas Wingate in favor of the state. A difference this time, is that PokerStars has been instructed to pay about $1.3 billion as a fine following the request of the state officials to the court, for the poker site to add another 12% in interest payments.
All reasons given by the Court of Appeals for throwing the case out the window were overturned by the Supreme Court. The Supreme Court stated that the Commonwealth is in fave a person. Also, PokerStars was considered a “winner” even though it was not a participant. It pointed out that the house – PokerStars – counts as a winner in a game of chance as it collects a percentage even if it is not banking the game.
Governor Andy Beshear stated that the actions of PokerStars was “irresponsible and criminal” and is glad that the state won the case. Earlier in the year, the governor called on lawmakers to pass online gaming legislation. In his press conference, he said, “This will never be enough to make up for the damage to Kentucky families and the state from their years of irresponsible and criminal actions, but this is a good day for Kentucky.”
Flutter, who acquired The Stars Group in May 2020, has come out to say that the fight is not over. Even as the Supreme Court, being the last recourse in a legal battle has ruled, Flutter still said to its investors that there are “a number of legal processes” it can explore. We are not sure how Flutter will process with the case, but we will see what happens pending the finalization of the court order.