The company lost a judgment over Kentuckians who lost over $290M on its website from 2006 to 2011

Kentucky moves to collect part of $1.3B owed by PokerStars after Supreme Court's ruling

The Kentucky Supreme Court on Thursday made its judgment final by refusing to rehear the gambling case, which it decided in the state’s favor in December. 
2021-03-26
Reading time 2:02 min
Lawyers for the state are filing a motion in Franklin Circuit Court to collect $100 million in bonds posted five years ago by PokerStars. The Supreme Court on Thursday made its judgment final by refusing to rehear the gambling case. A court hearing on the bonds is expected on April 19.

The state of Kentucky is pursuing part of the $1.3 billion owed it by PokerStars, which ran what the Kentucky Supreme Court has described as “an illegal internet gambling criminal syndicate,” Gov. Andy Beshear’s office said Thursday.

Lawyers for the state are filing a motion in Franklin Circuit Court to collect $100 million in bonds posted five years ago by PokerStars after it lost a judgment and began a lengthy appeal, said Beshear spokesman Crystal Staley, as reported by Lexington Herald-Leader. A court hearing on the bonds is expected on April 19.

The Supreme Court on Thursday made its judgment final by refusing to rehear the gambling case, which it decided in the state’s favor in December. The high court said Kentucky’s Justice and Public Safety Cabinet legally was entitled to collect damages on behalf of about 34,000 Kentuckians who lost more than $290 million on PokerStars’ website from 2006 to 2011. Wagering on online poker is illegal in Kentucky. State law allows lawsuits to recover money lost to such gambling.

Franklin Circuit Judge Thomas Wingate sided with the state in 2015, ordering the company to pay $290 million and then tripling the damages for what he cited as illegal behavior. The Court of Appeals later reversed Wingate, but the Supreme Court reversed the Court of Appeals.

“The commonwealth’s recovery in this case is certainly not a windfall, as the Court of Appeals seems to assume; rather, it is a recoupment of some portion of the countless dollars the criminal syndicate has cost Kentucky collectively and Kentuckians individually,” the Supreme Court ruled in December.

“The Commonwealth of Kentucky suffered financial losses along with the tragic damage to its citizens,” the high court ruled. “Mental and physical health care systems that care for the citizens harmed by the illegal gambling are supported in part by the state. Money sent to offshore gambling accounts is lost and the state deprived of the taxes to which it is entitled. The cost to prosecute and incarcerate individuals who resort to crime to support their gambling is a huge cost on Kentucky’s strained and overextended penal system.”

Whether Kentucky gets to collect its award remains to be seen. Executives from Ireland-based parent company Stars Interactive Holdings told lawyers for then-Gov. Matt Bevin’s office in a November 2016 meeting that Kentucky “will never collect a dime” from the online poker lawsuit, even if it wins the case on appeal, according to motions the state filed in Franklin Circuit Court at the time.

The executives said their company has many “tools in its toolbox” to avoid paying the judgment and the state “would not recover ‘$870 million, not $870, not even $87,’” according to the state’s motion. The state cited those remarks to unsuccessfully seek larger bonds from the company than the customary maximum of $100 million.

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