The fine stemmed from PokerStars (owned by The Stars Group) violating the state’s anti-gambling law from 2006 to 2010. It was was the biggest-ever fine leveled against a company in Kentucky history.
What Happened in the $870m Lawsuit
Kentucky State Cabinet Secretary John Tilly filed the $870.7 million lawsuit against PokerStars in 2010. The sum was shocking when considering that Stars only made an estimated $18 million off Kentucky residents from 2006-10.
However, the state argued that their citizens lost around $290 million over the five-year span. Franklin Circuit Judge Thomas Wingate agreed with the state’s assessment and ordered that PokerStars pay triple the amount for breaking the law.
Wingate added an additional 12 percent interest until Stars repaid the entire amount. All the money was supposed to go to the Kentucky government, rather than the players who lost.
The Rational Group, which owned PokerStars at the time, launched an appeal. This process has been carried on by the new owner, The Stars Group.
On December 21, a three-judge panel rejected the original ruling by the trial court. Judge Allison Jones believed that allowing the judgement to stand would do nothing for those who lost money at PokerStars.
“The Commonwealth is not bringing this action to collect the money and then return losses to the ‘losers,’” wrote Jones. “It is bringing this action to collect treble damages for its own benefit.”
State Cabinet spokesman Mike Wynn is disappointed over the ruling. He wrote “[the] decision doesn’t appear to even address the substantive issues in the case, but rests entirely on procedural questions.”
Kentucky has the option to re-appeal the case. They could even go all the way to the Kentucky Supreme Court. But as it stands, the Bluegrass State is currently a loser in this case.
This loss ends a string of successes by Kentucky against online gambling. Partypoker paid $15 million to settle a lawsuit leveled by Kentucky. Full Tilt Poker paid $6 million to end litigation.