Flutter to pay $300m out of court settlement in Kentucky lawsuit
FTSE 100 operator “considers the matter closed” and escapes $1.3bn fine in historic PokerStars case
Flutter Entertainment has agreed to pay more than $300m (£219.7m) to the Commonwealth of Kentucky to settle a long-running legal dispute with authorities over alleged illegal gambling.
Issuing an update on the London Stock Exchange, Flutter confirmed that $200m would be paid to the Bluegrass State, in addition to a $100m supersedeas bond previously paid as a guarantee in the dispute.
A supersedeas bond is a type of surety bond that a court requires from an plaintiff who wants to delay payment of a judgment until an appeal is over.
In return, Kentucky authorities have agreed to cease all further legal action in respect of the case, which centres on historic activities of its PokerStars brand in the state, under previous owners The Stars Group (TSG).
The settlement is vastly reduced from the initial $1.3bn demanded by Kentucky authorities, an amount which included $870m in damages as well as compound interest.
No details have been released about the repayment terms or period of repayment.
In a statement confirming the settlement, Flutter said: “The group strongly believes that this agreement is in the best interests of Flutter shareholders.
“The group now considers the matter closed.”
In December 2020, the Kentucky Supreme Court reinstated a prior 2015 ruling against TSG over the operation of the PokerStars brand.
Officials in Kentucky originally sued PokerStars in 2010 under the auspices of the state’s Loss Recovery Act (LRA), which allows losing gamblers to reclaim losses by direct legal action against the operator involved.
If the affected gambler fails to bring legal action against the operator involved within a six-month period, a third party – which in this case is the State of Kentucky – can file a civil lawsuit which allows for the initial damage claim to be trebled.
The ruling, made in the Franklin Circuit Court, charged TSG with historic violations of the Unlawful Internet Gambling Enforcement Act (UIGEA) between 2007 and 2011 and ordered the firm to pay $870m in damages.
The Franklin Circuit Court ruling had previously been overturned in December 2018 following an appeal by TSG against the decision in the Kentucky Court of Appeal.
However, by reinstating the ruling, Kentucky’s Supreme Court ordered the operator to pay additional compound interest accrued following the initial dismissal, bringing the total payable punishment to a whopping $1.3bn.
Earlier this month, Flutter blasted officials in the state over the case, citing usage of a “centuries old statute” which had created a “Frankenstein’s monster” of a settlement claim.
The firm made the claim as part of its petition to have the case reheard by the US Supreme Court, a petition which is seemingly rendered moot by this latest settlement agreement.