TVG's sister company must pay massive judgment in Kentucky case
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The Kentucky Supreme Court ruled 4-3 on Thursday against PokerStars, reinstating a judgment of $870 million, plus interest, the company must pay to the state of Kentucky.
The legal fight began in 2015, when PokerStars – which shares the same parent company, Flutter Entertainment PLC, as TVG – turned over its Kentucky gaming data after being sued by the state for breaking the Unlawful Internet Gambling Enforcement Act. The Franklin Circuit Court ruled in favor of the state but was reversed by the Kentucky Court of Appeals, which ruled the state lacked standing in the case.
The damages are determined by the amount of money lost in the state through PokerStars operating an illegal offshore gambling scheme.
“There is no doubt the Commonwealth of Kentucky is harmed by illegal internet gambling,” Justice Samuel Wright said in his majority opinion. “The Commonwealth is the people – and Kentuckians and their families are harmed by the impact of illegal gambling, not to mention the government funds that have been expended to address the societal and fiscal harm caused by PokerStars.”
Wright’s ruling goes on to list those “societal costs” from problem gambling as at least $81 million per year. The decision also details why the company should be required to pay the full amount.
“PokerStars’ choices required that it pay the full amount under the Loss Recovery Act because it chose to form an illegal internet criminal gambling syndicate, violated court orders to stop, and hid the identity of the co-conspirators until they could no longer be sued under the Loss Recover Act," the court wrote.
Flutter released a statement after the ruling, expressing optimism that it will not have to pay the full judgment.
“Flutter is 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. “This litigation had sought recovery of alleged losses by Kentucky residents during a period between 2006 and 2011 relying on a centuries-old statute.”
Flutter claimed in the statement to have multiple legal options available, but did not give any specifics.
"Together with its legal advisors Flutter is currently reviewing its position,” per the company's release. “No liability was previously recognized by either TSG or Flutter in relation to this. Flutter’s balance sheet remains robust.”
The legal fight began in 2015, when PokerStars – which shares the same parent company, Flutter Entertainment PLC, as TVG – turned over its Kentucky gaming data after being sued by the state for breaking the Unlawful Internet Gambling Enforcement Act. The Franklin Circuit Court ruled in favor of the state but was reversed by the Kentucky Court of Appeals, which ruled the state lacked standing in the case.
The damages are determined by the amount of money lost in the state through PokerStars operating an illegal offshore gambling scheme.
“There is no doubt the Commonwealth of Kentucky is harmed by illegal internet gambling,” Justice Samuel Wright said in his majority opinion. “The Commonwealth is the people – and Kentuckians and their families are harmed by the impact of illegal gambling, not to mention the government funds that have been expended to address the societal and fiscal harm caused by PokerStars.”
Wright’s ruling goes on to list those “societal costs” from problem gambling as at least $81 million per year. The decision also details why the company should be required to pay the full amount.
“PokerStars’ choices required that it pay the full amount under the Loss Recovery Act because it chose to form an illegal internet criminal gambling syndicate, violated court orders to stop, and hid the identity of the co-conspirators until they could no longer be sued under the Loss Recover Act," the court wrote.
Flutter released a statement after the ruling, expressing optimism that it will not have to pay the full judgment.
“Flutter is 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. “This litigation had sought recovery of alleged losses by Kentucky residents during a period between 2006 and 2011 relying on a centuries-old statute.”
Flutter claimed in the statement to have multiple legal options available, but did not give any specifics.
"Together with its legal advisors Flutter is currently reviewing its position,” per the company's release. “No liability was previously recognized by either TSG or Flutter in relation to this. Flutter’s balance sheet remains robust.”
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