Flutter loses Kentucky appeal on PokerStars $870m litigation

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The Supreme Court of Kentucky has rejected Flutter Entertainment Plc’s offer to rehear the state’s case against its PokerStars subsidiary.

The FTSE100 company’s request responds to the Kentucky Court of Appeals overturning its decision that PokerStars owed the Commonwealth of Kentucky. $870 million for unlicensed online poker wagers made between 2006 and 2011.

In 2018, the Kentucky court ruled 4-to-3 to reverse an earlier dismissal that had cleared PokerStars’ former owner Amaya Inc from paying an $870 million settlement to the Commonwealth of Kentucky.

The decade-long conflict relates to PokerStars’ ongoing US activity. The majority of online gambling operators left the US market when the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006.

Despite legal confusion, PokerStars remained active to its US clients. They claimed that online poker was a “gray area” within the scope of the UIGEA.

However, in 2011, the US Department of Justice increased the UIGEA’s mandate to include digital interstate payments and deposits. It essentially outlawed online poker – causing PokerStars and its industry rivals to discontinue their services abruptly.

The Commonwealth of Kentucky filed a complaint against PokerStars, alleging the state’s 18th century “Loss Recovery Act.” It stated that Kentucky courts have the power to seize money from illegal gambling practices.

In a 2015 decision, a Kentucky judge levied an ‘award’ of around $290 million. It would later be triple the $870 million. With an additional 12 percent compound interest each year.

The PokerStars Kentucky dispute reemerged in December of last year when Kentucky’s Supreme Court affirmed the Commonwealth’s rights to seek legal action.

The Kentucky judgment was authorized as Flutter completed its $11 billion mergers with The Stars Group Inc. It then became the most profitable company in the global gaming industry.

Flutter and TSG said that PokerStars’ Kentucky litigation, not a potential liability. “Flutter will continue to consider its role in relation to the decision with its legal counsel.

It will include potentially bringing the case decision to the US Supreme Court and other legal avenues that it might seek in the future.

“Flutter remains adamant with the statement. And states that any money spent to settle this matter will be a small portion of the reinstated judgment. The court will announce further statements as of and when appropriate.”

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Nassima Azmzm

Nassima Azmzm

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