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Kentucky Judgment Against PokerStars Reinstated

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PokerStars Kentucky Judgment

PokerStars was handed perhaps their biggest loss ever in the Kentucky Supreme last week. The court reinstated a Franklin Circuit Court judgment against PokerStars. If the judgment is paid in full, PokerStars will need to pay $1.3 billion.

The judgment covers activities of PokerStars prior to Black Friday. Should The Stars Group pay the penalty, it would be the heftiest fine paid to date by the company, topping the fines paid in connection to Black Friday.

PokerStars Judgment Reinstated by Kentucky Supreme Court

Back in 2015, PokerStars was slapped with an $870 million judgment due to operating in Kentucky after the passage of the UIGEA. Naturally, PokerStars appealed the ruling and subsequently won on appeal to the Kentucky Court of Appeals in 2018.

The case went on to the Kentucky Supreme Court and that court decided last week to reinstate the 2015 judgment. As such, The Stars Group is now facing a fine of $870 million along with compounding interest of $12%. This brings the total amount of the judgment to $1.3 billion.

According to a statement from the majority of the Supreme Court:

“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. The Commonwealth of Kentucky suffered financial losses along with the tragic damage to its citizens. 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. The Commonwealth of Kentucky has losses due to PokerStars’ illegal internet gambling criminal syndicate. The amount recovered in this case may not cover the actual cost suffered by the Commonwealth of Kentucky.”

The Stars Groups Says That PokerStars Only Made $18 Million in Kentucky

The Stars Group issued a statement on the judgment last Thursday. According to that statement, “ the gross gaming revenues that TSG generated in Kentucky during the relevant period were approximately $18 million.” The relevant period in question is 2006 through 2011.

The penalty is over 72 times the amount earned by PokerStars during the time period in question. Flutter states that it plans to take further legal advice in the matter and says that, “Flutter is confident that any amount it ultimately becomes liable to pay will be a limited proportion of the reinstated judgment.” Flutter Entertainment, the parent company of The Stars Group, also stated that the company never recognized any liability from this

Kentucky Judgment Nearly Double That of Black Friday Settlement

Those of you that remember the Black Friday saga in the United States may remember that PokerStars paid $731 million to settle charges stemming from Black Friday. Out of that settlement, the company paid $547 million to the government and then repaid $184 million to players of Full Tilt Poker. Some of that $184 million was used to repay Absolute Poker and UB players.

The Kentucky Judgment almost doubles the Black Friday penalty. Looking at the amount of money that PokerStars claims to have made in Kentucky, the penalty seems more than excessive. It is very likely that some form of settlement will be reached between Flutter Entertainment and Kentucky regarding the penalty. Don’t be surprised to see the company pay out something closer to $150 million to settle this matter.

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