Industry Reports

Next Stop State Supreme Court: Was Kentucky Right to Seek $870 Million in Gambling Damages from The Stars Group?

The Stars Group has been involved in a legal feud with the Commonwealth of Kentucky for the past eight years and only recently the State Court of Appeals ruled in favor of the gaming company. Back in 2015, the company was threatened by a penalty reaching $870 million, which was reversed by a three-judge panel of the Court of Appeals and was welcomed by Marlon Goldstein, Executive Vice President & Chief Legal Officer of The Stars Group.

Legal battles in the gaming field could continue for years on end without hope for a final ruling. Exactly three years after the nearly $1-billion dollar penalty was first introduced as a potential outcome of the lawsuit and about eight years after the initial filing of the suit a notable point of it was reached.

According to the ruling, The Stars Group will no longer be threatened by the stellar fine for the lawsuit. However, there are projections that matters could reach the Kentucky Supreme Court.

Kentucky Utilized Loss Recovery Act

Back in 2010, the Commonwealth of Kentucky filed a lawsuit against the company formerly known as Amaya Gaming Inc. The main reason for this was the supposed money losses generated by residents of the state on the PokerStars poker platform over the period between 2006 and 2011. Arguments in support of this decision pointed out that on a state, level players could seek compensation for their losses and fight against the winners of a gaming event.

Legal action took this situation on a completely new level. Dispute commenced back then, as the gaming company claimed that the amount sought by Kentucky is inaccurate. Taking into account the data, players had spent only about $18 million. The action was part of a larger action against Absolute Poker, Ultimate Bet, and Full Tilt Poker. Back at the early stages of this dispute, a judge ruled that Kentucky should bag $290 million in addition to treble damages.

Shortly after that Amaya appealed, as according to the aforementioned law, players are the ones that ought to recover illegal gaming losses and the state is not mentioned anywhere. This is what eventually tilted the scales in favor of the gaming brand, as the court pointed out that any other decision will mean that the court is unjust and it would mean that the Loss Recovery Act could be taken advantage of by anyone.

What Comes Next?

What should be taken into account is that there were no particular players involved in the lawsuit which also worked in favor of The Stars Group. The Commonwealth of Kentucky did not name any particular individuals negatively impacted by PokerStars operation during the said period.

The poker platform’s parent company was more than content with the ruling and celebrated, but in the meantime, their rivals in court might be preparing to take matters to Kentucky’s Supreme Court. Upcoming weeks will see more development in the case which has the potential to reach the decade mark.

Soon after the ruling, Mr. Goldstein pointed out that such an outcome should be avoided and the gaming giant might be interested in an offer that would settle the legal feud for good. The Stars Group purchased PokerStars in 2014 for some $4.9 billion as part of the deal for Rational Group.