PokerStars ordered to pay Kentucky USD 1.3 B in damages

The Kentucky Supreme Court upheld on Thursday a Franklin Circuit Court ruling from 2015 ordering PokerStars to pay damages of nearly $1.3 billion, ending the decade-long legal battle between the company and the state.

The commonwealth won the original judgment seeking $300 million from PokerStars for collecting that amount from its offshore operation of illegal online gambling in Kentucky from 2007 to 2011, the Courier-Journal reports.

However, the Kentucky Court of Appeals reversed that lower court decision and dismissed the case two years ago, ruling the state lacked the standing to file the claim and could not identify any individuals with standing who lost money to PokerStars.

In a 4-3 decision, the Kentucky Supreme Court reinstated the original judgment, with the amount of the damages owed by PokerStars growing to $1.3 billion due to interest.

The majority opinion of the court, written by Justice Samuel T. Wright III, ruled the state did have standing and was entitled to "a recoupment of some portion of the countless dollars the criminal syndicate has cost Kentucky collectively and Kentuckians individually."

"The Commonwealth of Kentucky suffered financial losses along with the tragic damage to its citizens," Wright wrote. "Mental and physical healthcare 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." 

Gov. Andy Beshear cheered the ruling as "a good day for Kentucky," but said the $1.3 billion reward "will never be enough to make up for the damage to Kentucky families and to the state from their years of irresponsible and criminal actions." 

“This better positions us to emerge from this painful pandemic to help Kentuckians, help our businesses, provide quality health care to more Kentuckians, strengthen our public schools and keep our promise to educators and other public employees — some of whom were on the front lines battling the fallout from their greed.”

Flutter, parent company of PokerStars, said in a statement it has "a number of legal processes available" and "is confident that any amount it ultimately becomes liable to pay will be a limited proportion of the reinstated judgement."

"Flutter is wholly surprised by today’s ruling and strongly disputes the basis of this judgement which, it believes, runs contrary to the modern US legal precedent."

During his coronavirus press briefing on Thursday, Beshear said the legal process is not yet complete as his administration will "aggressively seek these dollars," though the full amount may not be recovered.

"They have kept us as a Commonwealth in court far too long," Beshear said. "And remember, it was them engaging in criminal activity. At different points ... they have not done the right thing, and they're going to have to step up and do it now."