Global gambling group Flutter Entertainment petitioned the US Supreme Court, seeking a review of a $1.3-billion regulatory settlement for damages against subsidiary The Stars Group (TSG).
Damages for Historical UIGEA Violations
The petition relates to a December 2020 ruling of the Kentucky Supreme Court to reinstate a 2015 ruling against TSG made in the Franklin Circuit Court, which found the Flutter-owned brand in historic violations of the Unlawful Internet Gambling Enforcement Act (UIGEA) in the period between 2007 and 2011. The court had ordered the operator to pay $870 million in damages.
The claim against the brand was filed in 2010 under the Loss Recovery Act, which allows Kentucky gamblers to seek their losses via direct legal action, and if they do not file against the operator within six months, any third party can file a civil lawsuit and seek damages three times the gambler’s loss.
The reinstated ruling of the Franklin Circuit Court, which was initially overturned in December 2018 after TSG had filed an appeal in the Kentucky Supreme Court, added salt to the wound by ordering the operator to also pay the compound interest accrued following the dismissal, making the total settlement amount to $1.3 billion.
Having seen a petition for a local rehearing of the case denied in March, Flutter was left with no other option but to refer to the US Supreme Court. “These monstrous damages cry out for this court’s review. Even in matters of state concern, this court applies constitutional brakes to ‘damages that run wild,’” Flutter stated in the petition, slamming the huge settlement ruling amount, which “exceeded the actual losses of Kentucky players by a factor of 34 and petitioners’ revenue by a factor of 50.”
‘Grossly Excessive Punishment’
Flutter claimed the upheld by the Kentucky Supreme Court multi-billion judgment “is utterly disconnected from any rational measure of real-world harm,” stating that for that period, its gross gambling revenue in the state amounted to just $26 million, a tiny fraction of 2020 Kentucky State Lottery’s ticket sales of $1.2 billion.
This case is the poster child for a grossly excessive punishment prohibited by the Due Process Clause of the Fourteenth Amendment and the Excessive Fines Clause of the Eighth Amendment.”Flutter Entertanment
Reasoning its request for the review, Flutter stated that the Kentucky court allowed the state “to aggregate all lost wagers” of its citizens into a single action, calculating damages to the state “solely by reference to losing hands without factoring in the winning hands or petitioners’ revenue,” and instead of overturning the excessive punishment with no connection to the real damage, the Kentucky court tripled the amount to create “a Frankenstein’s monster of an award.”