PokerStars pays $300 million to Kentucky to settle lawsuit

A lengthy legal battle between PokerStars and the state of Kentucky ended earlier this week following a settlement agreement that will see Flutter, the parent company of PokerStars, pay Kentucky $300 million.

Flutter agreed to pay Kentucky an additional $200 million on top of the $100 million they paid to the state last April. As part of the settlement Kentucky has agreed drop any further actions against Flutter or PokerStars regarding the matter.

This concludes a decade-long legal battle between the two parties that was originally thought to have ended in late 2020 when the Kentucky Supreme Court ordered PokerStars to pay the state $1.3 billion. The original suit that led to that ruling argued that between 2007 and 2010 PokerStars illegally operated in Kentucky and approximately 34,000 state residents deposited and lost $300 million.

A lower circuit court ruled in Kentucky’s favor in 2015. The state then requested trebled damages and the court increased the amount owed by PokerStars to $870 million. PokerStars, then owned by The Stars Group successfully appealed that ruling. The state then re-appealed which sent the case to the state Supreme Court.

The Supreme Court ruled that they agreed with the original ruling from 2015, putting the $870 million ruling back on the table. After the state also asked for 12 percent in interest payments it jumped up to $1.3 billion.

After the ruling negotiations went between Flutter and Kentucky went behind closed doors while Flutter reportedly tried to take the matter to the US Supreme Court. Instead of another court room battle Flutter and Kentucky settled the matter with the combined $300 million payment.

In a statement to their shareholders Flutter said, “The Group strongly believes that this agreement is in the best interest of Flutter shareholders. The Group now considers the matter closed.”

The conclusion of the legal actions between Flutter and Kentucky could allow PokerStars to expand into more states where online poker has been legalized. Some states included Bad Actor language in their online poker legislation which kept PokerStars out of their market due to their previous connections to poker’s Black Friday. PokerStars currently operates in New Jersey, Michigan and Pennsylvania.