Flutter Entertainment, the parent company of PokerStars, has petitioned the U.S. Supreme Court to accept its appeal of a controversial 2015 judgment. the Commonwealth of Kentucky received the judgement in connection with PokerStars' offerings to Kentuckians from 2006 to 2011. The original $870 million settlement has ballooned to more than $1.3 billion with accrued interest.
Flutter announced its intent to dispute the judgement in an earnings report released earlier this month. The company has now filed a writ of certiorari to have the case considered. News of the writ's filing came from veteran gaming attorney Darren Heitner. Heitner obtained and posted Flutter's writ publicly, and it remains otherwise unavailable via online court databases.
The Supreme Court typically takes months to decide which few cases it will accept out of the thousands of attempted appeals it receives each year. Only a small percentage of cases are accepted for appeal. The case involving PokerStars, however, includes unusual points of law that may improve its chances of being accepted.
Kentucky-PokerStars case awarded 'monstrous' damages
Flutter's writ focuses on the excessive damages awarded to the state by a Kentucky Circuit Court judge. The ruling granting Kentucky the $870 billion in damages used an 18th century Kentucky law called the Loss Recovery Act. However, that law hadn’t been invoked in more than 60 years, and it calculated damages based on antiquated social assumptions.
The writ asks for the amount of the judgment to be reviewed, rather than seeking to overturn the judgment itself. Kentucky has already seized a $100 million bond posted by PokerStars' former owner, Amaya Gaming, as part of its compensation in the case.
"These monstrous damages cry out for this Court’s review," the writ states. "Even in matters of state concern, [the U.S. Supreme Court] applies constitutional brakes to 'damages that run wild.' In cases involving punitive damages, this Court has repeatedly admonished that awards exceeding actual harm by more than a single-digit ratio likely violate the Constitution."
The initial $870 million judgment exceeded the actual funds lost by Kentuckians by a factor of more than 30. PokerStars generated roughly $18 million in rake from Kentucky-based players during the four-and-a-half year period covered by the lawsuit.
Writ also cites hypocrisy of Kentucky's claims
Flutter's writ also attacks the hypocrisy in Kentucky's claims that PokerStars' online-poker damages caused immeasurable damages and human suffering. The writ notes, "The PokerStars platform accounted for only a tiny fraction of the gaming occurring in Kentucky, much of which takes place in the State’s own lottery."
Kentucky is also home to Churchill Downs, the location of the Kentucky Derby, one of the nation's largest single-day wagering events. Churchill Downs also operates twinspires.com, which is seeking to establish an online-gambling footprint in multiple U.S. states.
The hypocrisy targeting PokerStars was on full display in 2020, when the Kentucky Supreme Court reinstated the judgment against PokerStars. Justice Samuel T. Wright III wrote that Kentucky was entitled to "a recoupment of some portion of the countless dollars the criminal syndicate has cost Kentucky collectively and Kentuckians individually."
In fact, the dollars were very countable. PokerStars voluntarily provided the data relevant to Kentuckians' play on the site. And online poker was very much a grey legal area, unlike online sports betting, despite the "criminal syndicate" claims. When the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) in 2018, it affirmed that online poker and most other forms of online gambling were indeed legal under federal law.
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