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Stars Group's $870m Fine Rejected as Invalid
January 3, 2019 Petar Mitrovic
The Court of Appeals of Kentucky decided to quash a $870m fine against Stars Group, which now expects the Commonwealth of Kentucky to challenge the ruling. When it reversed the judgement, the appeals court said…
…that allowing the complaint by the Commonwealth to move forward would only lead to “an absurd, unjust result.”
Tumultuous Past
The state has launched legal action against PokerStars in 2010 for the first time. At that point, the company was owned by Rational Group. Reportedly, the operator provided gaming services to 34,000 residents of Kentucky illegally for a period ranging from October 2006 to April 2011.
It is important to mention that it was October 2006 when the Unlawful Internet Gambling Enforcement Act (UIGEA) was introduced.
The parent company of PokerStars, Rational Group, was acquired in 2014 by Amaya and they were awaited with a fine of $290 million in November 2015. Franklin Circuit Court Judge Thomas Wingate issued to fine…
…only to triple it a month later on a special request made by the state. Two years later, Amaya rebranded as the Stars Group.
“We applaud the decision of the highly-respected three-judge of the Kentucky Court of Appeals,” said the Stars Group’s executive vice-president and chief legal officer, Marlon Goldstein. “The merits of the case prevailed and we look forward to putting this matter behind us as we sharpen our focus on executing on our growth strategy going forward.”
It Drags On
Even though this could be considered a temporary victory, Stars Group is well aware that this isn’t the end of the matter.
The next move for the Commonwealth is to petition the Court of Appeals for a rehearing or ask the case to be reviewed by the Supreme Court of the state. These are the steps which could be taken and they are something the brand forecasted.
However, Stars Group, which is spreading around the US, is ready to dispute any and all liability should the Kentucky Supreme Court take over the case.
Before the things escalated with the latest ruling, it was still possible to come to an agreement out of court settlement but that option went down the drain. The company is defending its position by stating that Kentucky has attempted to exploit a “centuries-old statute” which encouraged those who incurred any losses to take action again their opponents.
Loose Case?
Another thing which pops up here is that the state hasn’t managed to identify specific PokerStars customers who had lost money during the period of 2006 to 2011. This is something Stars Group is pushing.
And speaking of the matter, the company intends to petition for the release of a $100 million supersedeas bond which was posted to “maintain” the lower court’s order during the appeal process. At this point, around $300 million can be found in an indemnity escrow fund…
…which was established under the merger agreement with Rational Group. The case between the state of Kentucky and Stars Group is apparently go for a while.
Source:
“Kentucky court quashes $870m Stars Group fine”, igamingbusiness.com, January 2, 2019.
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I believe Stars Group is right in this case. I mean, even if there are those who lost sums of money will not do anything because this was long time ago and how will they prove it? Plus, they knew what they were doing, they could have won just as easily and then what? Certainly they wouldn’t take action in that case.