In a stunning reversal, a Kentucky appeals court has overturned what was the largest ever judgment against a company in the state’s history. In that ruling, the three-judge panel voted to release PokerStars, now the Stars Group, from the $870 million judgement awarded by a trial court judge back in 2015.
Largest Ever Decision in Kentucky History
In 2015, Franklin Circuit Court Judge Thomas Wingate found that PokerStars “willfully violated Kentucky anti-gambling laws” in offering online poker to Kentuckians. The state’s Attorney General at the time, Jack Conway, estimated that more than 34.000 people took part in PokerStars’ offerings between 2006 and 2011. Judge Wingate stated at the time that PokerStars didn’t have to pay it off all at once but would incur a 12% interest charge until the $870 million was paid.
Those dates are important. The Unlawful Internet Gaming Enforcement Act of 2006 signaled the departure of major online poker sites such as PartyPoker and 888 from the U. S. Other private operations, such as PokerStars and others, decided to still accept U. S. players after the UIGEA was signed into law. 2011 saw “Black Friday” hit the poker world, which saw the departure of PokerStars and other sites after their sites were seized by U. S. law enforcement.
But, Wait a Minute…
The precursor of The Stars Group, Amaya Gaming, stated at the time that they would appeal Wingate’s decision and it has taken three years to do so. The three-judge panel that reviewed the case overturned that decision on Friday, stating that the Attorney General nor the state have the “legal right” to sue for any monies that might have been wagered during the period. The Court of Appeals stated “[a]llowing a complaint, like the one put forth by the Commonwealth, to move forward would lead to an absurd, unjust result.”
“We applaud the decision of the highly-respected three-judge panel of the Kentucky Court of Appeals,” stated Marlon Goldstein, Executive Vice President & Chief Legal Officer of The Stars Group. “The merits of the case prevailed, and we look forward to putting this matter behind us as we sharpen our focus on executing on our growth strategy going forward.”
Naturally, the state of Kentucky isn’t happy with this decision from the appeals court. A spokesman for the Kentucky Justice and Public Safety Cabinet, Mike Wynn, stated that officials are planning to appeal to the Kentucky Supreme Court. The Stars Group knows that the legal team in the Bluegrass State has several options available to them. The Stars Group expects the Commonwealth to either petition the Court of Appeals for a rehearing or seek discretionary review of the Court of Appeals decision by the Kentucky Supreme Court and intends to vigorously dispute any and all liability in the event the Kentucky Supreme Court grants review and hears the appeal.
The Stars Group is also looking to get some of the monies back that have already been put in escrow regarding the case. Approximately $300 million is in an escrow account as a part of the deal that sold Amaya Gaming to The Stars Group. That $300 million was towards the settlement of this case and any costs incurred in defending the case. If the case is dismissed, then The Stars Group is trying to make sure this money comes back to them.
With The Stars Group expanding across the States of America, the ending of the case in Kentucky with a clear judgment is important to the company. As more states look to online gaming and poker, not having the specter of the Kentucky case hanging over their heads is critical to their abilities to function in the U. S.