The state of Kentucky can collect $100 million in bonds that were posted by an online poker company that recently lost a $1.3 billion judgment to the state, a judge has decided.
But the rest of that huge sum might not be coming anytime soon.
The Kentucky Supreme Court ruled in December that PokerStars was “an illegal internet gambling criminal syndicate” that raked in more than $290 million from about 34,000 Kentuckians from 2006 to 2011.
Wagering on online poker is illegal in Kentucky. State law allows lawsuits to recover money lost to such gambling, with tripled damages. The state has pursued such a suit against PokerStars through the last three governors.
On Tuesday, Franklin Circuit Judge Thomas Wingate told the state of Kentucky that it can collect $100 million in bonds that PokerStars was required to post through insurance companies during the lengthy appeals process. The bonds must be surrendered to Kentucky within 20 days, Wingate ordered.
Gov. Andy Beshear’s office confirmed Wingate’s order on Wednesday but did not immediately respond to questions about how the money will be handled. Its first stop will be an escrow account designated by the state’s lawyers, the judge wrote in his order.
Collecting the rest of the $1.3 billion judgment might prove trickier for state officials. (And the state’s lawyers say the actual sum is now $1.59 billion, and rising, when you count compounded interest accruing at $504,477 per day.)
For one thing, although the litigation already has dragged on for a decade, PokerStars has asked the U.S. Supreme Court to review the case.
For another thing, lawyers for the state say in court filings that the company is transferring valuable assets, such as trademarks, and making comments that suggest “neither PokerStars nor its parent company, Flutter Entertainment, have any intention of paying the judgment.”
At an April 13 hearing in Franklin Circuit Court, a lawyer for PokerStars’ parent company, based in Dublin, Ireland, said British law does not recognize court judgments like Kentucky’s that award tripled damages.
“The statute in the United Kingdom treats the entire judgment as void and unenforceable,” the company’s lawyer, Sheryl Snyder of Louisville, said at the hearing. “So the simple point is, my client believes that when you get to the United Kingdom to collect, they won’t let you domesticate the judgment.”
State law generally caps the sum that defendants must bond in such cases at $100 million, but the state’s lawyers are asking Winburn to require a far larger sum to be put aside in bonds by the company if the case continues.