A Kentuckyjudge has ordered that PokerStarspay a minimum of $250 million in damages to the state for offering online poker in the Commonwealth after the Unlawful Internet Gambling Enforcement Act (UIGEA) was put into effect.
The state’s action was ostensibly brought on behalf of Kentucky poker players who lost money on the site between 2006 and 2011, yet it doesn’t stand to benefit those players in any way. The suit is predicated on an arcane law that allows third parties to recover up to three times the amount of money lost through illegal gambling.
“If the loser or his creditor does not, within six (6) months after its payment or delivery to the winner, sue for the money or thing lost, and prosecute the suit to recovery with due diligence, any other person may sue the winner, and recover treble the value of the money or thing lost, if suit is brought within five (5) years from the delivery or payment,” says the statute.
The suit not only targeted PokerStars, but several online gambling sites that operated during the aforementioned time frame. Franklin Circuit Judge Thomas Wingate presided over the trial and ruled that the state receive a total of $290 million in damages from those companies, some of which are now defunct. Kentucky wants Stars to pay at least $250 million of that total and has asked the judge for triple the original amount in damages, or $750 million.
Amaya said it would go after the former owners of PokerStars to recoup funds if needed. The company’s press release asserted, “To the extent the PokerStars entities may be ultimately obligated to pay any amounts pursuant to a final adjudication following exhaustion of all appeals and other legal options, Amaya intends to seek recovery against the former owners of the PokerStars business.”
PokerStars claims that in the five years after the UIGEA was passed, it only generated gross revenues of $18 million from players within the state. The company has asked the judge to reveal the calculations he used to arrive at his number.
After the verdict was issued, the Poker Players Alliance (PPA) sued to intervene in the case and appointed attorney Don Cox to represent the state’s players. The PPA’s goal is to make sure that in the event a settlement is paid the money go back to players, not to the state or its lawyers.
Attorneys for Kentucky say that the law doesn’t allow a single party, in this case the players, to seek damages. Ironically, the state itself is representing the players and claims that the law gives them the right to do it.
The PPA believes that since none of the settlement would actually go to players, the state’s suit is nothing but a cynical ploy to make a major cash grab. Attorney William Hurt, who tried the case on behalf of the state, asked the judge that it refuse the PPA’s requests to join. Hurt claimed that the organization was in cahoots with PokerStars and was only intervening to reduce the amount of damages its supposed partner would be ordered to pay.
“We are not funded by PokerStars,” said Cox. “There is no evidence in the record to support that.”