Federal Court Rules for Amaya in Illinois Loss Recovery Case, Could Affect Kentucky Case Outcome Also

In Illinois, Federal Appeals Judge Richard Posner dismissed a case to claw back gambling losses from PokerStars on the grounds that rake does not equal winnings. (Image: casnocha.com)

Amaya will not be required to pay back money lost by Illinois gamblers on PokerStars before Black Friday, a federal court has ruled.

The Court of Appeals for the Seventh Circuit last week upheld the earlier judgement of an Illinois court that a 19th century law designed to presumably protect both players who might have been swindled by a hustler back in the day, as well as the families of destitute gamblers, may not be invoked in an effort to claw back money from PokerStars.

The initial case had been brought by two Illinois mothers, who were seeking reimbursement for money lost by their sons, as well as other players. The foundation of their claim is an old statute still on the books called the Illinois Loss Recovery Law, which allows losing gamblers to sue winners for the return of their losses.

The law states:

Any person who by gambling shall lose to any other person, any sum of money or thing of value, amounting to the sum of $50 or more and shall pay or deliver the same or any part thereof, may sue for and recover the money or other thing of value, so lost and paid or delivered, in a civil action against the winner thereof, with costs, in the circuit court…

Statute of Very Few Limitations

The statute also theoretically permits third parties to recover up to three times the amount lost. If a losing gambler does not sue the winner within six months, then “any person” can claim up to three times the winnings.

While the two mothers claimed their sons had lost $50 each playing at PokerStars, they were, in fact, seeking to reclaim an undisclosed amount on behalf of other random Illinois losers too, possibly running into the millions.

The judge in the original case criticized the suit for failing to meet the legal thresholds, and failing to cite any specific “winning players” or the dates on which the alleged losses occurred. He also made the important distinction that rake charged by PokerStars could not be defined as “winnings,” and therefore PokerStars was not the “winner” at all.

Not Winning

A three-judge panel in the federal appeals court agreed with this summary.

“Their problem is that the defendants are not the winners of any game that any of the plaintiffs (or their sons) played,” wrote Judge Richard Posner on behalf of the panel. “Charging a fee for engaging in gambling is not the same as winning a gamble; a croupier who supervises a casino’s poker game is not a gambler, let alone a winner.”

This is a point that seems to be lost on the State of Kentucky, which is attempting to sue Amaya for a $870 million on a similar basis and using a similarly antiquated state law, except that in that case, the money would go to the state if successful.

Amaya is taking heart from the federal judgment in Illinois.

“We are pleased with this decision which applies a modern common sense approach to an out-of-date gambling law,” said Eric Hollreiser, vice-president of communications for Amaya and PokerStars. “We certainly hope that Kentucky courts apply the same modern logic.”

Katie Barlowe

Katie has forgotten more about slots than most people know. Not only does she follow the latest online happenings and developments, but she also knows her way around offline slots too. She's a collector too and enjoys restoring old slot machines when she's not writing news stories for Casino.org.

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Katie Barlowe