Controversial case exploits a Kentucky statute that allows a third party to litigate where a gambling loser or creditor does not do so
A county level case in Kentucky that had its genesis in a failed 2008 attempt to seize the international domains of online gambling companies (see previous InfoPowa reports) is back in the headlines this week with the news that Franklin Circuit Court Judge Thomas Wingate recently awarded a $290 million judgment against defendants Pokerstars and its parent group, Amaya Group Holdings.
Amaya is to appeal the issue.
InfoPowa readers will recall that Judge Wingate adjudicated the domains issue and a subsequent and related 2010 case against Pokerstars and Full Tilt. The current litigation was recently joined by the Poker Players Alliance action group, which claims that the state is trying to fill its own coffers at the expense of players and their interests, which the legal company's suit has ignored and the PPA seeks to represent.
The defendants in the case are being pursued – reportedly on a contingency basis – by a private legal company representing the Commonwealth of Kentucky under the auspices of a seventy-three-year-old state statute which allows third parties to take up a case where a loser or creditor fails to do so, subject to specific timeframes.
The same statute has provision for the award of damages of treble any award made by the judiciary
Amaya and the state's legal company are both seeking clarification from Judge Wingate on how he arrived at the monumental award, which Amaya claims is significantly more than deposits paid in to Full Tilt and Pokerstars by Kentucky players in the timeframe covered by the suit.
During the 2006 to 2011 period covered by the litigation, Amaya says Pokerstars generated aggregate gross revenue in Kentucky of approximately $18 million.
The company claims that the Kentucky action is "frivolous and without merit", and says it will "vigorously dispute" any liability ordered by the court, and engage in state and federal appeals processes if necessary.
Amaya is also contesting whether the state can be defined as a person in terms of the 1942 statute, a question that speaks to whether the state has standing to make its claim.
A federal court has ruled that Kentucky can be regarded as a person for the purposes of this case, although US District Judge Gregory F. Van Tatenhove, in returning the matter to Wingate's court, noted that the federal court did not have jurisdiction in a gambling-related matter.
The appeal process could drag out the issue for several more years as it is argued back and forth, but it could have negative repercussions for the online gambling group in its future quests for licensing approval in US states that decide to legalise online gambling, some observers have speculated.
Online Casino News Courtesy of Infopowa
