PokerStars Kentucky court case

Flutter Entertainment Denied Kentucky Online Poker Appeal

The ongoing PokerStars vs. the State of Kentucky legal saga may be winding down for good, leaving in place a $1.3 billion judgment against Flutter Entertainment.

Lawyers for the state have already filed a motion to collect the first $100 million of the $1.3 billion judgement.

Recently, the Supreme Court denied a motion from Flutter Entertainment to rehear the case. The ruling is final at the state level, but Flutter says it is weighing its options, including a potential appeal to the US Supreme Court.

Kentucky Online Poker Court Case Timeline

2010: The Kentucky Justice and Public Safety Cabinet files a lawsuit against PokerStars, alleging it operated illegally in Kentucky between 2006 and 2011. The state argues Kentuckians lost more than $290 million while playing on PokerStars during that time.

2015: Siding with the state, a judge in Franklin County rules that PokerStars had “willfully violated Kentucky anti-gambling laws.”

Judge Thomas Wingate orders PokerStars to pay $290 million and then triples the damages to $870 million, citing the obscure 1796 Loss Recovery Act, which states that a third party can sue for citizens’ losses to illegal gambling operations and triple the damages.

2018: Following years of appeal, the Kentucky Appeals Court overturns the $870 million judgement against PokerStars, now under ownership of The Stars Group.

The three-judge panel rules against Kentucky on the basis that it is not a “person” under the 1796 Loss Recovery Act.

Marlon Goldstein, then-Chief Legal Officer of the Stars Group, applauds the decision.

“The merits of the case prevailed, and we look forward to putting this matter behind us as we sharpen our focus on executing on our growth strategy going forward,” he said.

Shortly after the 2018 judgement, the Justice and Public Safety Cabinet vows to appeal to Kentucky Supreme Court.

December 2020: The Kentucky Supreme Court overturns the previous ruling and reinstates the massive judgment, with interest. PokerStars is now on the hook for $1.3 billion in damages.

“The commonwealth’s recovery in this case is certainly not a windfall, as the Court of Appeals seems to assume; rather, it is a recoupment of some portion of the countless dollars the criminal syndicate has cost Kentucky collectively and Kentuckians individually,” says Supreme Court in December.

“The Commonwealth of Kentucky suffered financial losses along with the tragic damage to its citizens. Mental and physical health care systems that care for the citizens harmed by the illegal gambling are supported in part by the state. Money sent to offshore gambling accounts is lost and the state deprived of the taxes to which it is entitled. The cost to prosecute and incarcerate individuals who resort to crime to support their gambling is a huge cost on Kentucky’s strained and overextended penal system.”

March 2021: Flutter announces the Kentucky Supreme Court has denied its petition to reheat the case.

Now, Kentucky is pursuing part of the $1.3 billion owed, and lawyers have filed a motion in the Franklin Circuit Court to collect $100 million in bonds posted by PokerStars five years ago after losing a previous case. A hearing on the bonds is expected to be held next month.

An announcement from the Governor’s office states Kentucky will “take aggressive steps to collect the judgement for the benefit of Kentuckians.” Beshear wrote that as a result of the ruling, the state is in an even stronger position to help residents emerge from the pandemic.

What’s next for Flutter Entertainment?

Flutter has announced it strongly disagrees with the latest ruling and is conferring with its legal advisors to see how it can move forward.

One of its options is to take the case to the US Supreme Court. However, the Supreme Court only takes up a small fraction of the petitions sent to it each year and Flutter’s chances are slim on this front. It will be up to Flutter’s executives to come up with other creative solutions to minimize the damage.

In a March 25th announcement, Flutter said it “remains confident that any amount ultimately paid to resolve this matter will be a limited portion of the reinstated judgement”.

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