PokerStars will pay $300M for UIGEA violations
On September 22, 2021, Flutter Entertainment (parent company of PokerStars) finished an eight-year case with a lawsuit filed by the Kentucky state over the poker room's UIGEA violations from 2006 to 2011. As a result, the company is due to pay $300,000,000. What could this mean for the owners of PokerStars and the development of online poker in the US? We'll try to figure it out in this article.
Black Friday legacy
Although "Black Friday," the most pivotal event in the history of online poker, took place more than a decade ago, we still see the ramifications of the US Justice Department's decision to implement the UIGEA. They could be seen in the situation with US-friendly poker rooms, complicated legalization affairs in the industry, etc.
Back in 2020, we wrote about two remarkable cases:
And if the founder of the poker room got off with a fine of $30,000, then the Flutter company faced much higher expenses (up to $1.3 billion) along with establishing a dangerous precedent. Recently, this case was also put to an end.
Kentucky vs. PokerStars
After the December court decision, Flutter lawyers were looking for any opportunity to annul it or at least to reduce the fine as much as possible. In April of this year, the company was ordered to pay supersedeas bond for $100M, and the next month the state authorities received it in the form of securities.
On September 22, 2021, the following news appeared on the websites of both the Commonwealth of Kentucky and Flutter:
As it turned out, the appeal to the UK Protection of Trading Interests Act 1980 helped avoid much higher losses, so the fine amount remained the same as it was set in 2013.
At the same time, the state authorities noted that they still received $10M more than the initial $290M. Just a reminder: during the 2000s, PokerStars earned only $18M (rake) in Kentucky.
This compromise solution allowed the state authorities not to lose face in lengthy litigation, and for Flutter, it was the moment of the real ending of Black Friday and the beginning of operation in the US market from a "blank slate." It is especially relevant in light of the latest news about the possible takeover of Entain (owner of partypoker) by DraftKings (US betting industry operator).
- For PokerStars owners, finishing the legal dispute means continuing the fight for the US market without any threats from the country's authorities and charges of violating the laws.
- Regarding US online poker, such a development will increase competition between top poker rooms and networks: PokerStars, partypoker, 888poker, GGNetwork.
Unfortunately, the aforementioned court decision won't change much regarding online poker regulation in the US. But it can be considered a good sign that all parties involved are trying to leave old problems in the past and are focused on future development.
Currently, poker fans from the rest of the world can only follow this development and play against the Americans at those poker rooms that continue the traditions of the 2000s by ignoring local laws and operating under non-US jurisdictions
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