In a victory for an online poker giant, the Kentucky Court of Appeals on Friday threw out an $870.7 million judgment against the operator of PokerStars, which had been imposed under the state's anti-gambling law.
The court's 3-0 decision reversed a ruling of Franklin Circuit Judge Thomas Wingate, who had found the Stars Group liable for that amount in a suit brought by the state Justice and Public Safety Cabinet.
Sheryl Snyder, an attorney for the company, said: "We are pleased not only with the Court of Appeals vacating the $870 million judgment, but also with the well-reasoned opinion appropriately limiting the scope of the antiquated statute at issue."
The cabinet's secretary, John Tilley, sued under a state law that allows gamblers or "any other person" to sue the winner to recover money lost in games of chance.
The cabinet could ask the state Supreme Court to hear the case. Neither its spokesman nor its outside lawyers could be reached for comment.
The anti-gambling law dates back to England's 1710 "Statute of Queen Anne," which prohibited the enforcement of gambling debts and allowed recovery by the losing gambler or any other person on the gambler's behalf.
No individual Kentucky gamblers sued to get their money back from the company or its subsidiaries, which operate games online known as PokerStars. But Tilley sued on their behalf, under the portion of the law that allows other persons to try to recover for them.
Writing for the Court of Appeals, however, Judge Allison Jones held that part of the statute is designed to allow gambler's dependents, including their spouses and children — not the government — to recover for gambling losses incurred by the family breadwinner.
"The commonwealth undoubtedly has an interest in the public policy behind suppressing illegal and unregulated gambling," she wrote.
"However, allowing the Commonwealth to recover the losses in the stead of the actual 'losers,' or other dependents of those 'losers,' would contravene the purpose" of the law — "to allow those losers to recover their losses and avoid becoming destitute as a result of a gambling problem."
For the purposes of the gambling law, known as the Loss Recovery Act, Jones noted that the state is not a "person."
The court also said adopting the state's logic could lead to an "absurd, unjust result" — that any person could bring suit against an online poker company and "walk away a billionaire" without having ever identified a single gaming transaction.
Wingate had awarded the cabinet $290.2 million in damages and tripled that amount, as provided under the law.
PokerStars calls itself the largest poker site in the world. It is operated by the Stars Group, based in Toronto, which also offers games that include BetStars, Full Tilt, BetEasy, Sky Bet, Sky Vegas, Sky Casino, Sky Bingo, Sky Poker and Oddschecker, as well as live poker tours in in Europe, Latin America and Asia.
The company contended the Kentucky suit was improper because the cabinet never identified a single actual loser. It also asserted the gambling law didn't apply because poker is a game of skill rather than chance.
The suit was first filed in 2010 and amended several times to include additional defendants.
https://www.courier-journal.com/story/news/2018/12/21/online-poker-group-judgment-tossed-kentucky-court/2390110002/