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PokerStars fined over a billion dollars

The Kentucky Supreme Court ruled on December 17th, 2020, to re-impose a fine on Stars: considering all penalties and interest, its total amount could reach $1.3 billion! Today we will try to analyze the details of this case and its possible consequences.

PokerStars fined over a billion dollars

Kentucky vs. PokerStars

Black Friday does not want to let PokerStars go even after the founder of the room, Isai Scheinberg, was brought before a US court. Recently, another lawsuit was ruled against Amaya and The Stars Group from Kentucky’s state authorities.

A brief history of this litigation looks like this:

  • In 2013, a lawsuit was filed following an investigation of PokerStars in the state from 2006 to 2011, which was conducted contrary to the UIGEA. It was found that the room attracted 34 thousand state residents and $290 million. 
  • In 2015, District Court Judge Franklin Wingate ordered Stars to pay triple the amount to the state. The rationale was the old law on compensation for damages (LRA) from illegal gambling organizers and a precedent 130 years ago.
  • In 2018, the Court of Appeal overturned this decision. 
  • On December 17th, 2020, the Kentucky Supreme Court ruled the lawsuit valid again. 

Considering all the interest and penalties on the claim from the state of Kentucky, PokerStars, or rather, Flutter Entertainment, which owns the room, must pay almost $1.3 billion in fines! 

Flutter’s reaction and business outlook

Flutter banner

It is quite logical that the holding that owns Stars were, to put it mildly, very much surprised by this news and are currently looking for ways to cancel or reduce the fine.

After all, the room earned only $18 million in rake in the state and is not eager to compensate for the abstract “damage caused to the families of Kentucky and the state as a result of many years of irresponsible and criminal actions,” as Governor Andy Besheer said. 

The situation is complicated not only because the state authorities are going to the end and fix their financial problems during the pandemic at the expense of Flutter but also because they will have to deal with the same court further, which is the highest authority in this matter.

All sane people understand that Flutter merely physically can’t make such payments. But even if the amount of the fine can be significantly reduced, the very fact of its payment will create a precedent. And since it is the case law in place in the US, what will prevent the remaining 49 states from bringing their claims against PokerStars, claiming the same “sky-high” fines?

What’s next?

Kentucky Supreme Court fined PokerStars

As a result, the owners of PokerStars need only a complete zeroing of the fine and a “friendly” solution to the issue. 

We have already written many times about the importance of the US market for Flutter and the actions that the holding is taking to prepare PokerStars for a full return to it (leaving the gray markets, the case of Isai Scheinberg). 

Kentucky’s lawsuit surfaced at a perfect time for all opponents of the full legalization of online poker in the States and Stars in particular. Therefore, do not discard the idea that very influential people helped it to become relevant again.

As a result, in 2021, we will have a new and no less exciting series in the “PokerStars vs. Kentucky” series. In the meantime, we can say that US-friendly poker rooms will not see the red spade as a full-fledged competitor in this market for a long time. 

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Vargoso 21.12.20
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