Kentucky Grabs $100M of PokerStars Bonds Per Judge

Kentucky Grabs $100M of PokerStars Bonds Per Judge

“We have not yet begun to fight!” says PokerStars, probably, in its case versus the Commonwealth of Kentucky. That is difficult to say, though, considering it all began in 2008.

Both Kentucky and PokerStars had significant wins as the case moved through the US court system. Kentucky started it seizing 141 online gambling-related domains for violating the Unlawful Internet Gambling Enforcement Act (UIGEA). When companies recovered their domains, Kentucky’s Governor Steve Beshear sued PokerStars – and several others – for rake they collected between 2006 and 2011.

After Black Friday, PokerStars remained the only viable poker operator as the lawsuit continued, and the Franklin County Circuit Court ruled that PokerStars owed the state more than $870M…plus interest. However, the Kentucky Court of Appeals overturned that ruling in favor of PokerStars, but the Kentucky Supreme Court affirmed the original decision.

By that point, after years of interest, PokerStars appeared to owe about $1.3B.

PokerStars appealed again, but the Kentucky Supreme Court would not reconsider. Now, as PokerStars is a part of the larger Flutter Entertainment, there is talk of an appeal to the United States Supreme Court.

Meanwhile, Kentucky wants its money.

Remember Those Bonds?

When PokerStars lost its initial case in the Franklin County Court, the judge ruled that PokerStars had to post $100M in bonds. Kentucky couldn’t touch it, but it was there.

The March ruling by the Kentucky Supreme Court to deny PokerStars’ motion to rehear the case put the payment plan in motion. Now-Governor Andy Beshear pushed to obtain money from Stars, deciding to go after the $100M in bonds first. Flutter, on behalf of PokerStars, filed a motion with the original Franklin Circuit Court to stay any payments pending Flutter’s decision-making process regarding appealing the case to the US Supreme Court.

Judge Thomas Wingate, the original judge in the case – the one that ordered the domains seized years ago and who continues to rule for the Commonwealth of Kentucky – denied that motion from Flutter.

On April 23, Wingate ordered Kentucky to collect the bonds worth $100M. To make that happen, he commanded PokerStars release the funds within 20 days of the ruling. Beshear indicated that the money will first go to a designated escrow account but told the media nothing regarding further steps.

Much More Outstanding Money

The amount of money that the Commonwealth of Kentucky believes PokerStars owes varies. The original amount of $870M grew through the years with interest, as Kentucky allows lawsuits to recover triple the actual damages related to crimes like gambling.

As a reminder, the lawsuit echoed Beshear’s bombastic cries that PokerStars is an “illegal internet gambling criminal syndicate.” Those words hit hard for people who don’t understand the nature of online poker or PokerStars as a company. It would be nice if the poker industry had an organization that could have written an amicus brief to the court…like the Poker Alliance…but I digress.

Back to the actual damages that Kentucky wants to collect, the state’s attorneys claim that the sum rose from $1.3B in recent years and now sits at $1.59B. Interest stops for no appeal. It actually compounds, and the Lexington Herald Leader reported it accrues interest of $504,477 per day.

Those Kentucky attorneys asserted that PokerStars has been transferring valuable assets like trademarks. Neither it nor Flutter “have any intention of paying the judgment.” At the same time, Flutter attorneys did say in court this month they abide by British law, which does not recognize things like triple damages in court awards.

Flutter does appear to be appealing the case to the US Supreme Court. That makes the next steps for Kentucky’s lawyers even more difficult.

 

 

About Jennifer Newell

Jennifer began writing about poker while working at the World Poker Tour in the mid-2000s. Since then, her freelance writing career has taken her from Los Angeles to Las Vegas and back to her hometown of St. Louis, where she now lives with her two dogs. She continues to follow the poker world as she also launches a new subscription box company and finishes her first novel. Jennifer has written for numerous publications including PokerStars.com and has followed the US poker and gaming market closely for the last 15 years. Follow Jen on Twitter

Disclaimer: The information on this site is my interpretation of the laws as made available online. It is in no way meant to serve as legal advice or instruction. We recommend that you seek legal advice from a licensed attorney for further or official guidance.

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