Flutter settles Kentucky-PokerStars case for $300 million

Haley Hintze
Published by:
Posted on 09/22/2021

Flutter Entertainment plc, the parent company of PokerStars, announced today that it has reached a $300 million settlement with the Commonwealth of Kentucky. The settlement ends the long-running legal battle between a series of PokerStars owners and the U.S. state over the site’s pre-Black Friday online poker services in the state.

The $300 million settlement had been hinted at by Flutter as early as March, yet took nearly another half year to finalize. It consists of an additional $200 million to be paid, plus a $100 million supersedeas (appellate) bond that Kentucky officials had previously seized.

“The Group strongly believes that this agreement is in the best interests of Flutter shareholders,” Flutter declared. “The Group now considers the matter closed.” Flutter inherited the issue when it purchased the Stars Group from Amaya in 2019.

Kentucky to stop all further collection proceedings

As part of the settlement, Kentucky will cease all further attempts to collect the judgment. Kentucky’s case was built on an antiquated anti-gambling law that a Circuit Court judge interpreted to give the state standing to sue.

The Kentucky-PokerStars case’s $290 million in damages was itself a massively inflated figure. That number was then trebled under the 19th-century statute, to $870 million. With interest accruing for several years since the initial 2015 judgment, the total value of the judgment was nearing $1.4 billion.

Nonetheless, legal questions remained regarding Kentucky’s ability to collect the judgment from an international corporation. The already-seized $100 million appellate bond was deemed forfeited to Kentucky after the state’s Supreme Court narrowly reversed an appellate-court ruling that had, for a time, tossed out Kentucky’s claims of damages in their entirety. The Kentucky Supreme Court’s reversal instead reinstated the massive judgment.

U.S. Supreme Court appeal rendered moot

Today’s settlement also renders as moot Flutter’s hopes that the U.S. Supreme Court would accept the case for review. Last month, attorneys for Flutter filed a writ of certiorari, the process through which cases of all sorts are submitted to SCOTUS (Supreme Court of the United States) for review.

However, the U.S. Supreme Court only accepts a tiny percentage of cases submitted to it for possible appeals. The PokerStars-Kentucky matter did have an unusual background, and its submission for review was based on the idea that the judgment was highly excessive and legally unfair. That legal uncertainty helped impel Kentucky officials to accept the $300 million total settlement.

Featured image source: Twitter/TomForth