Kentucky Supreme Court Deals Another Blow To PokerStars, Which May Appeal To U.S. Supreme Court

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The Kentucky Supreme Court on Thursday dealt yet another blow to PokerStars and its parent company.

The state’s high court denied a petition from Flutter Entertainment for a rehearing of the December 2020 decision to award the state a judgment of $1.3 billion, the company announced Thursday. The judgment included a trebling and interest on non-payment from PokerStars.

Originally, the judgment was trebled to $870 million, which then grew to $1.3 billion due to interest.

The Kentucky Supreme Court, in a narrow 4-3 vote late last year, upheld the lower court ruling from 2015.

“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 U.S. Supreme Court along with other legal avenues which it may pursue thereafter.”

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To date, PokerStars has not paid any portion of the judgment. The firm is confident that any payment would be partial. “Flutter remains confident that any amount ultimately paid to resolve this matter will be a limited portion of the reinstated judgment,” it said in a statement. “Further announcements will be made in due course as and when appropriate.”

From the mid-2000s until 2011 when PokerStars left U.S. cyberspace, about 34,000 Kentuckians had played on the platform. The PokerStars platform reportedly collected about $18 million in rake from those players. Rake is another term for revenue.

In last December’s ruling, the high court called illegal online gambling in Kentucky an “insidious problem” and going after offshore operators “an extremely difficult problem.” It cited costs to the state from tens of thousands of addicted gamblers, estimating total social costs at a “minimum” of $81 million annually.

PokerStars doesn’t currently offer online poker in Kentucky, but it does under a license in several other states. Some small offshore poker sites still offer online poker to Kentuckians.

Governor says Kentucky won’t stop pursuing payment

According to Kentucky Gov. Andy Beshear, a Democrat, even the $1.3 billion judgment is not enough.

“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,” Beshear said in December. “This better positions us to emerge from this painful pandemic to help Kentuckians, help our businesses, provide quality health care to more Kentuckians, strengthen our public schools, and keep our promise to educators and other public employees — some of whom were on the front lines battling the fallout from their greed.”

Beshear’s statement also noted that the state will “take aggressive steps” to collect.

It does not appear that PokerStars will have access to the Kentucky online poker market should it ever materialize. For the past several sessions legislation to legalize online poker has been considered, with Beshear himself calling for its legalization and regulation in the state. PokerStars would more than likely not be able to be involved until the legal saga with Kentucky is resolved.

Neighboring Indiana considered online poker legislation this year, but it was tabled for potential consideration until 2022. Indiana would likely license PokerStars for online poker if it legalized the activity. Flutter Entertainment currently offers its FanDuel sports betting product in the Hoosier State.

Kentucky’s online poker efforts have been coupled with sports betting, all under the same proposal. It is not entirely clear if FanDuel could operate in Kentucky either until the PokerStars legal battle is resolved.

Kentucky’s sports betting policy efforts have not gained a ton of traction to date.

Flutter’s stock price fell nearly 5% in the wake of the December ruling. The market appears to have not reacted to Thursday’s news. It does not appear there is much, if any, investor fear that PokerStars will ultimately pay anywhere close to $1.3 billion to Kentucky.

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Brian Pempus

Brian served as a senior reporter and online content manager for Card Player Magazine for nearly a decade before joining USBets in October 2018. He is currently focused on legal and regulated sports betting and online gaming. He's an avid jiu-jitsu practitioner in his free time.

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