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KY Supreme Court restores $870m Stars Group judgement


Flutter Entertainment said it was “wholly surprised” by the Kentucky Supreme Court’s decision to reinstate a $870m judgement related to legacy activities of The Stars Group, that had been quashed by the state’s Court of Appeals in 2018.

It remains confident that it can reduce the sum owed on appeal, the operator added, after the Supreme Court resurrected the fine that was first issued in 2015 against The Stars Group, acquired by Flutter in May this year.

The reinstatement saw the court add compounding interest at a rate of 12% per annum to the sum owed.

In 2015, the PokerStars operator was ordered to pay $290m by Franklin Circuit Court Judge Thomas Wingate, who then tripled this sum following a request from the state. 

The judgement was the culmination of a case alleging that PokerStars provided gambling services to 34,000 Kentucky players between October 2006 – when the Unlawful Internet Gambling Enforcement Act (UIGEA) was introduced – and April 2011.

During this period, Flutter noted, the business generated revenue of approximately $18m from the state. 

However, the Kentucky Court of Appeals ultimately reversed the judgement late in 2018, saying at the time that allowing the complaint to progress would “lead to an absurd, unjust result”.

At the time, Stars Group’s then-chief legal officer Marlon Goldstein said he expected the Commonwealth to petition the Court of Appeals for a new hearing, or ask the Supreme Court to review the case. 

Flutter said it strongly disputed the basis of the Supreme Court judgement, arguing it “runs contrary to the modern US legal precedent”. 

“This litigation had sought recovery of alleged losses by Kentucky residents during a period between 2006 and 2011 relying on a centuries-old statute,” the operator said. 

It said it was currently reviewing its position, and there were a number of legal processes available to the business. 

“[Having] taken legal advice, Flutter is confident that any amount it ultimately becomes liable to pay will be a limited proportion of the reinstated judgement,” it added, though also noting that no liability was previously recognised by The Stars Group or Flutter in relation to the case.