PokerStars $870m Fine Cancelled By Kentucky Court

PokerStars can put down a huge burden it’s been forced to face for several years after a Kentucky Court overturned a decision that could have resulted in the online poker giant paying a massive $870 million in damages.

Marlon Goldstein, chief legal officer of The Stars Group said they look forward to putting the case behind them and will concentrate on enhancing their strategy going forward.

While not having to pay the massive fine is a huge relief, there are also many positives from this decision including the fact that PokerStars will not have to deal with the threat of potential legislative issues if the decision was upheld by the court.

Back in September 2011, Kentucky filed a lawsuit against PokerStars in the wake of the Black Friday scandal. The state was seeking damages and wanted a total seizure of the company’s domain name. Other online poker websites targeted by the lawsuit were Full Tilt Poker, Ultimate Bet and Absolute Poker.

In the lawsuit, the state was claiming right and ownership of the companies’ internet domains. PokerStars was ordered to pay $870 million in damages, though the basis of coming up with the figure was not very clear.

Under state laws, individuals are allowed to recover funds lost in illegal gambling. Despite PokerStars only collecting about $18 million from Kentucky residents, the state was awarded $290 million and the judge trebled the amount to $870 million as damages.

PokerStars Disputes Initial Ruling

Amaya Inc. the parent company of PokerStars appealed the decision, arguing that the statue cannot be applied to the state in general, but only to individuals trying to recuperate money lost in illegal gambling.

The Kentucky Court of Appeals ultimately decided in favour of PokerStars, reversing the original ruling. The judges ruled the complaint put forward by the Commonwealth of Kentucky was flawed and should have not been allowed to move forward as it would yield an unjust result.

Settlement May Wrap Up The Case

The success of the appeal has been attributed to the fact that the statute covers the losses of individuals but that those individuals were not party in the suit. The state seemed to have exploited an archaic law to gain benefits for itself. PokerStars can celebrate for the moment, but the decision is not final though, as the state can still take the case to the Supreme Court. A settlement remains a strong possibility, with PokerStars being in a stronger position to negotiate.