PokerStars Ordered to Pay $870M in Kentucky Lawsuit

For several years, the PokerStars brand has been fighting a lawsuit in the state of Kentucky. Before 2006, online poker rooms operated freely in the United States without repercussions. In 2006, legislation known as the Unlawful Internet Gambling Enforcement Act, or UIGEA, was created. This legislation would not allow online poker sites to operate in the United States. However, some online poker rooms continued to function online in the US.

The state of Kentucky quickly took matters in their own hands and filed a lawsuit against the PokerStars brand for offering online gaming to residents in the state. The lawsuit was seeking reimbursement for losses of residents based on an age-old law, that many feel should not be considered. The Poker Players Alliance has gotten involved in the lawsuit to try and see the players be reimbursed instead of the state getting any funds that might be awarded.

The lawsuit has lasted for many years and covers PokerStars operations from 2006 to 2011. On Wednesday, a judge in Kentucky, ordered PokerStars, now owned by Amaya Gaming, to pay $870 million for operating in the state during the time frame stated in the lawsuit. Amaya does plan to appeal this ruling and has stated in the past they would seek compensation from the previous owners if they were to own money due to the lawsuit.

Thomas Wingate, a Franklin Circuit Judge, ruled that PokerStars willfully decided to violate the anti-gambling laws of Kentucky, based on information from the Associated Press. The suit claims that over 34,000 players spent a minimum of $5 during a time frame from 2006 to 2011, which leads up to Black Friday.

In the past, PokerStars settled with the federal government, paying $731 million in the process, though not admitting any wrongdoing. The company has recently been approved to offer their services in the state of New Jersey. Amaya Gaming stated that PokerStars took in around $18 million from players in Kentucky from the period listed in the lawsuit. The brand feels the amount listed by the state are inflated greatly.

The judge in Kentucky stated that PokerStars will have to pay 12% in interest until the full $870 million is paid. It would be surprising to see Amaya seeking recovery from the former owners to pay the amount, as they have stated earlier. The company purchased the brand in 2014 for a total of $4.9 billion and the company was not in charge of the brand during the time frame listed in the suit.

In a statement on the subject, Amaya Gaming said that they plan on disputing any liability vigorously that may be ordered on a trial court level. The company believes that there are a number of legal arguments that are compelling that should be reserved for consideration. This includes the lack of standing to bring the proceeding in the name of the Commonwealth as well as the failure of the court to properly apply the law.

The PPA will also be working to try and ensure that any payment will go towards players of Kentucky instead of the government. In a previous statement before the ruling against PokerStars, the PPA stated that they feel the lawsuit is money grab by the cynical big government towards private consumer dollars to pay for their political excess. As of right now, it does not appear as if any money will go towards players. It seems that the government of Kentucky is trying to be paid for an age-old bill they are trying to apply to today’s times.