Kentucky Judge Rules $100m Bond Payment in PokerStars Case

A Franklin Circuit Judge has ruled out against PokerStars and ordered the $100 million in bonds placed with insurers to be paid to the state of Kentucky.

Kentucky Judge Sides with State in PokerStars Penalty

Kentucky is determined to seek interest payments from Flutter Entertainment, the present owner of PokerStars, for the card room’s operations between 2006 and 2011. The case was renewed by the Kentucky Supreme Court in December, arguing that PokerStars was an “illegal Internet gambling criminal syndicate.”

The company’s operations between 2006 and 2011 serviced 34,000 state residents and generated $290 million for the card room, the original ruling in December stated. In this context, the Supreme Court has renewed the $1.3 billion case against the operator, an established name in the poker world.

In a new development in the case, Franklin Circuit Judge Thomas Wingate sided with the state and said that Kentucky can collect $100 million worth of bonds that PokerStars had to deposit with insurance companies during appeals.

PokerStars now has 20 days, from the ruling on Tuesday, to transfer the bonds to the state. Both Flutter and PokerStars have denied wrongdoing and cited a previous ruling that settled the case. However, state authorities are persistent in their pursuit of the brand.

Effectively, Kentucky is acting against the 2018 ruling made by the state’s Kentucky Court of Appeals settled the matter and found no wrongdoing.

The news about the bond ruling was confirmed on Wednesday by Gov. Andy Beshear, who has largely been seen as a proponent of gambling legalization but thinning political capital may have made him more inclined to tread lightly on the issue.

PokerStars Willing to Stand Its Legal Grounds

That is just the beginning, Kentucky hopes, of collecting the full sum requested by the December ruling to the tune of $1.3 billion. However, state lawyers have argued that Kentucky is after $1.59 billion and the amount is increasing because of a compounded interest accumulated of $504,477 per day.

PokerStars is standing its ground firmly, though, and has requested from the US Supreme Court to step into the matter and review it. State lawyers have suggested that PokerStars and Flutter have not yet come to terms with the penalty, but given the ongoing debate whether the December ruling is fair, this is perfectly reasonable.

Earlier this month, Flutter Entertainment lawyer Sheryl Snyder said that British law doesn’t recognize triple damage payments such as the one that Kentucky is trying to push.

“The statute in the United Kingdom treats the entire judgment as void and unenforceable. So the simple point is, my client believes that when you get to the United Kingdom to collect, they won’t let you domesticate the judgment,” Snyder continued.

Meanwhile, state lawyers have urged Judge Wingate to up the cap of the $100 million that can be placed in bonds so that they can have more leverage in case PokerStars and Flutter continue to push back, as they will most likely do as Kentucky’s ruling is still highly-debatable in the context of a quickly legalizing poker industry.

Kentucky’s gung-ho approach may win it some short-term dividends, but it might just be failing to see the bigger picture.