Flutter Entertainment, the world’s largest online betting group, said it will fight a recent 4-3 ruling by the Kentucky Supreme Court that it must pay $870 million in damages stemming from an old lawsuit against PokerStars, one of Flutter’s newly acquired subsidiaries.
In a statement, the company said, “Flutter is wholly surprised by today’s ruling and strongly disputes the basis of this judgment which, it believes, runs contrary to the modern U.S. legal precedent. This litigation had sought recovery of alleged losses by Kentucky residents during a period between 2006 and 2011 relying on a centuries-old statute. Together with its legal advisers, Flutter is currently reviewing its position. No liability was previously recognized by either The Stars Group or Flutter in relation to this. Flutter’s balance sheet remains robust.”
Flutter was formed in 2016, the result of the merger of Paddy Power and Betfair. The new company acquired the Stars Group in 2019; that transaction was completed this past May. The Stars Group had just come out of a lawsuit when it was taken over by Flutter. Its subsidiary PokerStars, acquired by the Stars Group in 2014, was sued in Kentucky over alleged losses from 34,000 players between 2006 and 2011. Online gambling currently is illegal in Kentucky; under state law, it’s possible to sue to recoup losses of $5 or more from illegal bets.
In 2015, a Kentucky circuit court ruled the Stars Group must pay $870 million in damages from PokerStars. In 2018, the Kentucky Court of Appeals vacated that ruling. However, the recent Kentucky Supreme Court decision reinstating the damages against the Stars Group means Flutter is liable for the $870 million plus annual compounded interest of 12 percent, bringing the total to $1.3 billion. “There are a number of legal processes available to Flutter, and having taken legal advice, Flutter is confident that any amount it ultimately becomes liable to pay will be a limited proportion of the reinstated judgment,” the company said.
Kentucky Governor Andy Beshear praised the decision and said the estimated $1.3 billion would greatly help the state recover from Covid-19 losses. “This will never be enough to make up for the damage to Kentucky families and to the state from their years of irresponsible and criminal actions, but this is a good day for Kentucky.
“This better positions us to emerge from this painful pandemic to help Kentuckians, help our businesses, provide quality health care to more Kentuckians, strengthen our public schools and keep our promise to educators and other public employees—some of whom were on the front lines battling the fallout from their greed.”
