Following a lawsuit concerning illegally conducted casino-style gambling between 2006 and 2011, PokerStars’ parent company was ordered to pay the state $870 million. The state in which this lawsuit was filed is Kentucky, which had a law regarding the illegality of gambling since the 19th century.
The old law states that if players do not act within six months from the time they lost money through illegal gambling practices, third-parties have the right of collecting said sum. This law was viewed by Amaya, the owner of the poker site, as both antiquated and as a way for the Commonwealth to egregiously enrich the plaintiff’s contingent-fees.
Over the 5 year period stated in the accusation, over 34.000 Kentucky residents have lost almost $290 million on the online poker website, PokerStars. The lost sum was tripled by the judge in order to “teach the company a lesson” in regards to breaking the anti-gambling laws of Kentucky.
The fees do not stop here, as the judge ordered the payment of a preliminary sum of $104 million to the state of Kentucky until the full amount is acquired. This early sum consists of a 12% interest rate calculated over the course of a year. It will go higher and higher if parent company Amaya postpones the full payment.
Amaya has been the owner of PokerStars since 2014, when it acquired the creator of the website, Rational Group, following a $4.9 billion dollar takeover deal. The poker site in question is popular across the globe, not only in the US, with hundreds of millions of players worldwide.
The company plans of posting a bond in order to stay the order’s enforcement, with a proceeding appeal to follow in January. Amaya has also stated that the sum collected from players in the state of Kentucky rises to only $18 million, not the alleged $290 million.
This move of accruing money from PokerStars is also viewed as completely unhelpful towards the citizens of the state. None of the payments made towards Kentucky will actually reach their pockets, instead going directly to the state. Amaya has claimed that this lawsuit is a complete misuse and a distortion of the state’s law, used only to fuel the attorney’s pockets, not the public masses.
It is not surprising that the company views it in this manner, taking into account that the judge tripled the sum on the premise of “teaching the company a lesson” because he thinks that Amaya allegedly thought that “breaking the law was a good marketing practice”. The public may view these statements as both frivolous, as well as completely childish, unworthy of a federal judge.
Although PokerStars’ parent company was ordered to pay the state $870 million, this sum is rather small when considering the fact that PokerStars is the largest poker room website on Earth. Even so, this does not mean that this court ruling is viewed with ignorance, not in the slightest. Only time will tell if the lawsuit will remain in effect after the company’s appeal in January.