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Legal & Regulatory

Kentucky appeals court overturns The Stars Group charges

A Kentucky appeals court has reversed a lower court ruling that The Stars Group must pay the state $870m in damages.

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In its appeal, The Stars Group argued the Commonwealth was not the proper party to bring a claim against a company. The operator also argued the Commonwealth failed to identify any specific individuals who had lost money playing on The Stars Group brand PokerStars.

A statement from the court read: "Allowing a complaint, like the one put forth by the Commonwealth, to move forward would lead to an absurd, unjust result. It would mean any private person with knowledge of the general nature of Appellants’ electronic gaming format could allege a Lost Recovery Act (LRA) claim in a wholly conclusive and generic fashion and walk away a billionaire without ever having identified a single gaming transaction with specificity.

"The LRA was never intended to be used in this fashion. It was intended to promote natural persons who had knowledge of specific instances of illegal gambling to file suit to assist the Commonwealth in enforcing its anti-gambling regulations. To that end, we hold that even under our liberal notice requirements, a third-party LRA complaint must set forth basic facts such as the identity of the parties, date of the conduct, and nature of the gambling losses at issue.”

The charge in question dates back more than five years, when efforts from the state government were made to seize the domains of nearly 150 gambling websites, including PokerStars.

Judge Thomas Wingate made the ruling after determining PokerStars had violated the Unlawful Internet Gambling Enforcement (UIGE) between 2006 and 2011. He also added a 12% interest charge for every year until the amount was paid back.

Today, Judges Acree, Johnson and Jones at the Court of Appeals overturned this decision from the Franklin Circuit Court.

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