Kentucky Not to Pursue $870m in Damages from PokerStars

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A Kentucky court of law and the PokerStars damages case.
The PokerStars' damages case in Kentucky concluded with the state withdrawing its claims from the poker operator.

Kentucky will steer clear from pursing legal actions against PokerStars, The Star Group’s most famous online card room subsidiary. Previously, the state sought $870 million in damages, a notion that it has since dropped.

Kentucky Between Legalization and Lawsuits

Kentucky might be cosying up to the idea of introducing online gambling, or so the refusal to pursue $870 million in damages would suggest.

The State’s General Attorney, Andy Beshear, has made a complete volte-face from what his father, Steve Beshear, did to the online gaming industry, effective contributing to its demise in the state. As irony would have it, Steve Beshear did in fact kill the industry and led much of the offence against it.

His son, though, wants to invite poker operators back to the state and use the money obtained through licensing and tax to start patching up Kentucky’s ailing finances and pension fund that is weight down by an exponentially growing debt.

After the shut-down of the card room nearly five years ago, the state of Kentucky decided to pursue legal action to offset the losses incurred by state players who had been caught in the preliminary shut-down of the card room.

Hardly a fair case, to begin with, the state has acclimatized itself to the idea that trying to achieve dialogue with the largest gambling operators in the world could be a better approach overall.

But it’s not the mildness of the state entirely that has helped The Stars Group avoid a major drain on its finances. The company had fought long and hard and it managed to establish two principles that went directly against the mounted offense of the state:

  • First, Kentucky’s Commonwealth couldn’t be recognized as “an individual”, making the legal demands unsubstantiated
  • Secondly, and far more importantly, the state couldn’t find actual people who had lost money after the shut-down

The 34-page decision of the court, outlined the case in great detail, carefully breaking down the logic behind the court’s decision:

In its response to the motions to dismiss, the Commonwealth noted that other defendants in the case had previously asserted standing and insufficiency of pleading arguments, which the circuit court had rejected.

A complete defeat of the bill was not uppermost on the mind of PokerStars in the slightest. Instead, the company had said on multiple occasions, including through its CFO Brian Kyle, that PokerStars wouldn’t mind settling the court case if an acceptable offer is brought to the table.

A Future for iGaming in Kentucky

Now that Kentucky has cleared one of the pending cases against a respectable operator, the state could consider bringing casinos onboard. It has been an opinion offered readily on multiple occasions already. According to iDevelopment and Economic Association general counsel Jeff Irah, this is still a distinct possibility.

However, there are new impediments to overcome, including a reportedly new DOJ decision to reverse the interpretation of the Wire Act to extend to online betting as well.

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