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PokerStars' Parent Files Appeal In Kentucky Dispute

Amaya Says Previous Owners Of Site Are 'Disputing All Claims'


The parent company of industry-leading PokerStars said Tuesday that is has filed a notice of appeal in its ongoing dispute with the state of Kentucky.

Amaya Gaming said it posted a $100 million supersedeas bond to stay enforcement of the $870 million order during the appeals process. A Kentucky judge late last year said that PokerStars owes the $870 million for doing business with state residents between 2006 and 2011.

Amaya said that it delivered $35 million in cash collateral as well as letters of credit worth $30 million in total, adding that it “will continue to vigorously challenge the trial court’s order.”

The Canadian gaming company bought PokerStars from founders Isai and Mark Scheinberg in 2014 for $4.9 billion, a move which help positioned the site to obtain a prestigious online gaming license in New Jersey last fall. Amaya said in December:

“To the extent the PokerStars entities may be ultimately obligated to pay any amounts pursuant to a final adjudication following exhaustion of all appeals and other legal options, Amaya intends to seek recovery against the former owners of the PokerStars business.”

Amaya said this week it received notice that PokerStars’ former owners are “initially disputing all claims set forth in Amaya’s notice of claim.” Amaya said that roughly $300 million is in an escrow fund from the merger with PokerStars.

“There can be no assurance that Amaya’s appeal will be successful or that its notice of claim will result in any amounts in the escrow fund being remitted to Amaya or that any of Amaya’s estimates of potential losses will reimbursed by the sellers or otherwise,” the company said.

According to Amaya, PokerStars took in roughly $18 million from Kentuckians during the period in question, adding that the amount of $870 million “is notable only for its absurdity.” If it gets the money, Kentucky wouldn’t give any of it to the 34,000 players who played on PokerStars between 2006 and 2011, but instead keep it within state coffers.

A similar case in Illinois recently went PokerStars’ way.

A federal court in Illinois dismissed the nearly identical case, finding that the parties going after PokerStars had no case because PokerStars merely facilitated the games. In other words, the players didn’t lose money to PokerStars, but rather other customers.

It’s part of the defense being used to get the Kentucky damages award overturned.

“To bring the action, Kentucky relied on a centuries old statute that was intended to allow individuals who incurred gaming losses to sue their opponents; it was never intended to authorize the Commonwealth to sue and collect such losses for its own benefit," Amaya said in December. "In fact, no other state in the union has brought an action under this type of antiquated statute to recover alleged gaming losses in the name of a state.”

Though it was once in hot water with the federal government, PokerStars settled that case in 2012 without admitting to any wrongdoing.

Tags: PokerStars,   Kentucky