Kentucky Supreme Court Orders $870M Payment From PokerStars

• Flutter could be stuck paying over one billion in damages from a five-year span where PokerStars was operating unlawfully in the state of Kentucky.
• Although the Supreme Court in Kentucky has ordered Flutter to pay this exorbitant sum, the company plans to fight the judgment.

FRANKFORT, Ky. – A judgment in Kentucky against PokerStars from 2018 has been turned over by the Supreme Court and now leaves Flutter, the new owner of the platform, left to pay the $870 million fine for liability and damages incurred by players of the application.

The original case stemmed from a five-year period of time where PokerStars was being investigated spanning from 2006-2011.

The online gambling outlet was found guilty of not complying with the Unlawful Internet Gambling Enforcement Act (UIGEA) by ceasing online business during this time as they were supposed to. Instead, they kept it business as usual and now Flutter has almost a billion dollars to pay the state of Kentucky because of it.

How It Started

PokerStars didn’t stop offering their online gambling services in the Bluegrass State. That’s what led them to be one of the companies that the Department of Justice apprehended in April because they were one of many gambling platforms that were involved in 2011’s “Black Friday,” when a crackdown on these outlets took place.

This would involve them in the current court case which has resulted in a fine of $870 million being paid to Kentucky under the Loss Recovery Act (LRA).

Unfortunately, within that timeframe, PokerStars made only $18 million, so the money expected to be paid back has been called extremely absurd because it’s more than 50 times the amount that was brought in during those five years.

Originally, in 2015 the court made this decision but it was later overturned in 2018. The issue was brought to light again in 2020 where it went back to the original judgment that now falls on Flutter, the new parent company of PokerStars.

What Happens Next?

The Supreme Court and the Court of Appeals share very different opinions about what should be done. PokerStars believes they should only be required to pay back the rake from their online poker platform and not the sum that the court has come up with.

The Court of Appeals leans more toward PokerStars point of view rather than that of the Supreme Court.

While a judgment handed down by such a high court is typically done as a last resort for an ultimate conclusion, Flutter refuses to believe that this is the end of the fight. They have told their investors that there are many courses of action that can be taken before they are stuck paying Kentucky.

Should those actions fail, they will need to pay about $1.2 billion because of the 12% interest rate tacked onto the payment cost. Although Flutter would be able to withstand such a crippling blow, often bringing in a few billion in annual revenue, it would still take the company down a few notches.

And with that, the fight on this issue of Flutter Vs. Kentucky from 2014 will continue on into 2021, but who will walk away the winner?