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Kentucky Wins $1.3 Billion Lawsuit Against PokerStars

Following A Decade-Long Fight In Court, The Kentucky Supreme Court Ruled In Favor Of The State

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The Kentucky Supreme Court reinstated a 2015 ruling from a Franklin Circuit Court Thursday and will order PokerStars to pay about $1.3 billion to the state.

The suit was originally filed in 2010 by Kentucky Justice and Public Safety Cabinet J. Michael Brown, who now serves as Gov. Andy Beshear’s executive cabinet secretary, for $290 million against the online poker site. The suit claimed that the site was operating illegally inside the state’s borders and that 34,000 residents deposited on the site and lost nearly $300 million.

Franklin Circuit Court Judge Thomas Wingate ruled in favor of the state in 2015. After the state requested trebled damages, Wingate ruled that the site owed the Kentucky government $870 million.

The Stars Group, which owns the site and was acquired by Flutter in May 2020, appealed the ruling. In 2018, a Kentucky Court of Appeals reversed Wingate’s decision. In Kentucky, anyone can sue “winners” to recover lost wages in a game of chance, but the court ruled that the state itself can’t sue on behalf of its citizens.

State officials decided to re-appeal the case and took it to the Supreme Court, where they received a ruling in their favor Thursday. The court agreed with the original ruling from Wingate and ruled that PokerStars is on the hook for the $870 million. After the state asked for an additional 12% in interest payments, the Supreme Court ruled that the total fine comes to $1.3 billion.

Although Beshear himself called on lawmakers to pass internet gambling legislation earlier this year, he called the actions of PokerStars “irresponsible” following the ruling.

“This 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, but this is a good day for Kentucky,” said Beshear.

His pro-gambling stance was a cornerstone of the 2019 Gubernatorial race as he promised to bring brick-and-mortar casinos to the state, while former Gov. Matt Bevin made wild claims about nightly suicides occurring at casinos. Since Beshear’s victory, there hasn’t been any progress on gambling legislation.

PokerStars operated in the U.S. in what many would describe as a legal grey area following the 2006 passage of the Unlawful Internet Gambling Enforcement Act. It left the market in the wake of Black Friday but returned in a limited fashion in 2016 after receiving a license to operate an online poker site in New Jersey. The company expanded into Pennsylvania’s recently legalized market in 2019.

Once the court order is finalized, the state will pursue payment from PokerStars.