Just when you think a case is over, it comes roaring back to life.
This time, however, we are not talking about the Mike Postle situation. The Kentucky Supreme Court denied a motion on Thursday from Flutter Entertainment regarding their court case that dates to 2015. The motion would have opened the case for reexamination by the Kentucky judicial system but, instead of getting a new hearing, Flutter was instead hit for a bill for the first $100 million of the fine.
$1.3 BILLION in Fines Expected to Be Paid
The Kentucky Supreme Court justices ruled back in December to reverse a decision that came down in favor of Flutter Entertainment. That decision from 2018 struck down the $870 million decision that had been previously rendered against PokerStars. Since that decision back in 2015, the time spent with appeal has seen another $260 million added on as interest to the previous decision, ringing up a $1.3 billion bill for Flutter.
There are several moving parts to the case, even today. In 2015 in a court in Franklin County, a judge found that PokerStars, then a privately owned organization that had been sold by the Scheinberg Family to Amaya Gaming, “willfully violated Kentucky anti-gambling laws” by offering PokerStars to Kentucky residents. The law is actually one that has been rarely used in ANY court, the 1796 Loss Recovery Act, which states a third party can sue for losses by citizens of the state in an illegal gambling operation. That third party can also claim triple the damages in the case.
The original case brought by the state of Kentucky alleged that PokerStars violated the state’s laws between 2006 (the enaction of the Unlawful Internet Gaming Enforcement Act) and 2011 (“Black Friday”). That case sought $290 million in damages which, after the decision of the Franklin County Circuit Court, was tripled to $870 million. Following the decision, Amaya Gaming carried on with an appeal, aware that interest was accumulating on the decision.
The decision to overturn the 2015 ruling in 2018 was a welcome one, but the new decision by the Kentucky Supreme Court reinstates the decision, the amount and adds on the interest. Kentucky has already taken steps to seize $100 million in bonds that PokerStars had put in escrow as the appeals process played out. Crystal Staley told the Lexington Herald-Leader that state attorneys have filed motions to seize this money towards paying off the $1.3 billion debt.
Would the Decision Change at the SCOTUS?
Flutter Entertainment is weighing their options for future actions, including possible further court actions and maybe an appeal to the U. S. Supreme Court in this particular case. But how would such a decision play out?
First, the SCOTUS only takes on about 100 cases during each session. There are usually thousands that are submitted for review, but the SCOTUS chooses only cases that have not been settled by lower court decisions or present distinctive Constitutional issues that would require a review from the top court in the land. A case such as Kentucky v. PokerStars does not appear, on the surface, to be such a case.
There is also a question as to how the SCOTUS would decide on this issue. In 2018, the Justices struck down the Professional and Amateur Sports Protection Act (PASPA), which has allowed individual states to make their own decisions regarding gaming. That does not seem to be something that would apply in this situation, however, as it was a case regarding gaming before that effective date.
It would also not matter that Kentucky is currently entertaining expanding gaming inside the state’s borders. Legislation was introduced last year that would open sports betting and online poker; it failed to gain traction and has been reintroduced this year. Governor Andy Beshear also has opined that he would like to see gaming expanded when he was running for election in 2019.
It is entirely likely that the SCOTUS would refuse to hear the case, which would put Flutter Entertainment on the hook for a $1.3 billion fine, an amount that would hobble many a successful company.
