Kentucky court says online poker site must ante up $1B

Published 9:10 pm Thursday, December 17, 2020

The Kentucky Supreme Court ruled Thursday that an online poker company must pay more than $1 billion to the state for illegal gambling losses in a court battle that began a decade ago.

The ruling from the state’s high court reinstated a Franklin Circuit Court judgment against after the state appeals court rejected the collection of the gambling losses in 2018. At the time, the total stood at $870 million, plus interest.

Gov. Andy Beshear said in a news release that the total amount that would be ordered recovered was nearly $1.3 billion.

“The Commonwealth of Kentucky has losses due to PokerStars’ illegal internet gambling criminal syndicate,” the court wrote in its ruling. “The amount recovered in this case may not cover the actual cost suffered by the Commonwealth of Kentucky.”

It is illegal to play online poker for money in Kentucky. A state law says people who lose $5 or more in illegal wagers have six months to file a lawsuit to recover the money. If they don’t, the law says “any other person” can sue to recover the money.

The Kentucky Justice and Public Safety Cabinet filed the lawsuit in 2010. From 2006 to 2011, the state said, about 34,000 Kentucky residents lost more than $290 million wagered on PokerStars’ website. The company later blocked Kentucky residents from using the site.

In 2015, Franklin Circuit Judge Thomas Wingate agreed with the cabinet’s suit and ordered the company to pay back $290 million. Wingate then tripled that amount against the company for making what he said was “a calculation that breaking the law was good for business.”

Beshear said Thursday that the state would “take aggressive steps to collect the judgment for the benefit of all Kentuckians.”

An emailed statement from Dublin, Ireland-based Flutter, the company that merged with PokerStars parent The Stars Group, said it was “wholly surprised by today’s ruling and strongly disputes the basis of this judgment which, it believes, runs contrary to the modern U.S. legal precedent.”

The statement said PokerStars’ gross revenues generated in Kentucky from 2006 to 2011 were around $18 million. The company said it is confident any amount it is ultimately liable for will be a “limited proportion of the reinstated judgment.”