Kentucky Supreme Court Rejects Flutter Request to Reconsider $1.3B Online Poker Ruling

Posted on: March 26, 2021, 03:44h. 

Last updated on: August 27, 2021, 11:31h.

The Kentucky Supreme Court on Thursday announced that it has denied a motion from a Flutter Entertainment plc subsidiary. The motion asked it to reconsider a case that could cost the gaming company – and give the state – about $1.3 billion.

Kentucky PokerStars lawsuit
Kentucky Gov. Andy Beshear (D) on Wednesday explains his veto of two public education bills passed by the General Assembly. On Thursday, the state’s Supreme Court upheld a ruling in the state’s favor against a former offshore online poker operator. The ruling could mean the state will receive up to $1.3 billion as a result. (Image: GovAndyBeshear/Twitter)

Back on Dec. 17, the state’s top court ruled in a 4-3 decision to reverse a 2018 lower appeals court ruling in favor of Stars Interactive Holdings. However, on Thursday, all seven state justices concurred against the rehearing.

The case itself has gone on for more than a decade. State officials sought to go after then-offshore poker operators like Stars Interactive’s PokerStars. Since that time, Stars Interactive– now part of Flutter-owned The Stars Group –has transformed into a company with licenses to operate cash-gaming sites in New Jersey, Pennsylvania, and Michigan.

It hinges on a centuries-old law, Kentucky’s Loss Recovery Act. Legislators passed the law in 1798, just six years after Kentucky became a state. The law allows gamblers to recover losses paid. If they do not pursue action, a third party can later sue for losses stemming from illegal gambling operations.

Third parties can seek treble damages, according to the law.

Next Step Could Be US Supreme Court

In a statement, Flutter told it’s not about to fold on the case.

Flutter is disappointed by the denial of its rehearing petition, and continues to strongly dispute the basis of this judgment,” the company said in a statement.

“Together with its legal advisors, Flutter will continue to consider its position in relation to the judgment, including potentially appealing the ruling of the case to the US Supreme Court, along with other legal avenues which it may pursue thereafter.

Kentucky Already Working to Claim Money

The Lexington Herald-Leader reported Thursday the state is already taking steps to claim at least some of the money.

Crystal Staley, director of communications for Gov. Andy Beshear (D), told the paper that state lawyers would file a motion in Franklin Circuit Court to claim $100 million in bonds that Stars Interactive posted as part of the appeals process.

A court hearing could take place next month, the Herald-Leader reported.

In December, the state estimated it would receive about $1.3 billion in damages. That’s based initially on the $290.2 million players lost in hands that PokerStars took a rake. The state assumed the losses were more substantial, but could only prove that amount.

That amount grows to $870.6 million based on the triple damages statute of the Loss Recovery Act. Accruing interest then puts it past the $1 billion mark.

Beshear said in December the large financial award would help the state emerge from the COVID-19 pandemic.

While the state pursued action against offshore poker sites, there has been some interest in expanding gaming options in the state. Andy Beshear ran on that platform, proposing to legalize casinos and sports betting. However, the Republican-led General Assembly has been mostly cool to those efforts.

That said, bills proposed by state Rep. Adam Koenig, R-Erlanger, to legalize sports betting in the state have included provisions for online poker as well. His bill passed his House Licensing, Occupations, and Administrative Regulations Committee last year. But it did not get a vote on the House floor.

He refiled the bill for this year’s session. Lawmakers’ focus this session, though, was on legalizing historical horse racing, thanks to a state Supreme Court ruling on that matter.

The sports betting bill will almost assuredly be refiled for 2022.