Kentucky judge issues $290M judgment against PokerStars & Amaya (now Flutter Entertainment)

[haleylh]

It took quite a bit of work, but I was able to obtain the actual judgment as written by Judge Wingate (Franklin County, KY) last month. The core reason Wingate issued the $290 million partial summary judgment, according to what he wrote, is that the pre-Amaya PokerStars did everything possible to keep from providing Isai Scheinberg and Pinhas Schapira for depositions. According to what Wingate wrote, Scheinberg's reps agreed to have him be deposed from London on June 3rd, but Scheinberg refused to show up for it.

Lots of outtakes and additional info here (an I'm sure Druff won't mind this link):

http://www.flushdraw.net/news/unobta...ucky-judgment/

Assuming the judgment isn't overturned somewhere down the road, that leaves Amaya needing to claw back the money from Scheinberg and other former Stars owners.

[MumblesBadly]

Amaya has already publicly responded, shows no sign of caving soon, but worst case will go after the former owners for recovery.

http://finance.yahoo.com/news/amaya-...065800010.html

Amaya intends to vigorously dispute any liability that may be ordered at the trial court level, and believes that there are a number of compelling legal arguments reserved for consideration, including, without limitation, the lack of standing to bring this proceeding in the name of the Commonwealth and the Court's failure to properly apply the law.

To the extent the PokerStars entities may be ultimately obligated to pay any amounts pursuant to a final adjudication following exhaustion of all appeals and other legal options, Amaya intends to seek recovery against the former owners of the PokerStars business.

A first guess is that KY and Amaya are likely to settle within about a year (when is that AG up for reelection?) for about 15% of the $290m, or about $40-$45m. KY's AG looks like a crime fighter, Amaya can turn around and seek recovery from Isai et al, and the net cost is a tiny fraction of Amaya's $2.6b market value.

[haleylh]

Amaya has already publicly responded, shows no sign of caving soon, but worst case will go after the former owners for recovery.

http://finance.yahoo.com/news/amaya-...065800010.html

Amaya intends to vigorously dispute any liability that may be ordered at the trial court level, and believes that there are a number of compelling legal arguments reserved for consideration, including, without limitation, the lack of standing to bring this proceeding in the name of the Commonwealth and the Court's failure to properly apply the law.

To the extent the PokerStars entities may be ultimately obligated to pay any amounts pursuant to a final adjudication following exhaustion of all appeals and other legal options, Amaya intends to seek recovery against the former owners of the PokerStars business.

A first guess is that KY and Amaya are likely to settle within about a year (when is that AG up for reelection?) for about 15% of the $290m, or about $40-$45m. KY's AG looks like a crime fighter, Amaya can turn around and seek recovery from Isai et al, and the net cost is a tiny fraction of Amaya's $2.6b market value.

Yeah, Eric H. sent me that quote yesterday as well; it's up in an earlier FD piece. I wasn't too worried about reading the tea leaves whuile writing that story, as I wanted to focus on Wingate's order and opinion. I'd guess your estimated settlement to be on the conservative side, just because of all the pressure Kentucky can cause to Amaya's US growth plans. But that stuff is a different story. Maybe tomorrow.

[BeerAndPoker]

This should be on the former owners unless the sale of the company paperwork states that Amaya take on all past debts and legal related issues. If that is the case the parties filing claims can legally go after the new owners for past debts instead of being forced to go after past owners which all they will care about is getting paid since this is an act of dirty, yet legal extortion by Kentucky

When it comes to money sometimes it don't matter who has to pay it so if Amaya agreed to some weird terms when purchasing the company then perhaps they screwed up royally and won't have a case against the former owners.

[Dan Druff]

Was Kentucky the same state as the one which once took Bodog's domain? Or was that Kansas?

BTW, Haley, you're correct... never mind relevant links to other sites. I'm pretty much the opposite of Mason, in that and many other ways.

[MumblesBadly]

This should be on the former owners unless the sale of the company paperwork states that Amaya take on all past debts and legal related issues. If that is the case the parties filing claims can legally go after the new owners for past debts instead of being forced to go after past owners which all they will care about is getting paid since this is an act of dirty, yet legal extortion by Kentucky

When it comes to money sometimes it don't matter who has to pay it so if Amaya agreed to some weird terms when purchasing the company then perhaps they screwed up royally and won't have a case against the former owners.

This would be very surprising.

[haleylh]

Next story is up, in which Judge Wingate goes off on PokerStars for having "fleeced" Kentucky and its players. Plus, Oldford Group and Rational Group extended an "invitation" (love these scare quotes here) to extend 5th Amendment privileges against self-incrimination to... overseas corporations.

Between the 5th Amendment and the fleecing stuff I still think the thread belongs in Flying Stupidity, but whatever.

http://www.flushdraw.net/news/more-k...nt-protection/

[MumblesBadly]

Amaya has already publicly responded, shows no sign of caving soon, but worst case will go after the former owners for recovery.

http://finance.yahoo.com/news/amaya-...065800010.html



A first guess is that KY and Amaya are likely to settle within about a year (when is that AG up for reelection?) for about 15% of the $290m, or about $40-$45m. KY's AG looks like a crime fighter, Amaya can turn around and seek recovery from Isai et al, and the net cost is a tiny fraction of Amaya's $2.6b market value.

Yeah, Eric H. sent me that quote yesterday as well; it's up in an earlier FD piece. I wasn't too worried about reading the tea leaves whuile writing that story, as I wanted to focus on Wingate's order and opinion. I'd guess your estimated settlement to be on the conservative side, just because of all the pressure Kentucky can cause to Amaya's US growth plans. But that stuff is a different story. Maybe tomorrow.

I base my estimate on a couple factor:
1) Amaya has legal means to drag this out to where they MUST pony up a check, including making KY fight for collections of Amaya's assets in other states.
http://www.ccaacollect.com/images/enforcing.pdf

2) I'm guessing that KY's AG probably would like a victory feather before the next election... (Checking election timetable)... which is...

URP! The most recent election was just last month! And the next one isn't until 2019!
https://ballotpedia.org/Kentucky_Att...election,_2015

And KY's AG is new to the office. So he has time to play hardball with this matter. With that, both the time frame and estimated settlement amount I gave yesterday *are* conservative. So, let's double the time frame (2 years) and increase the amount to about 25%: $70-$75m.

[Dan Druff]

BUMP

Kentucky Supreme Court reinstated the judgment against Pokerstars, who is now on the hook for over 1 billion dollars.

https://www.onlinepokerreport.com/46...kerstars-fine/

Cliffs:

- In 2013, Kentucky sued Pokerstars for operating illegally, and used an antiquated law called "Loss Recovery Act", which allows states to reclaim triple the losses of Kentucky residents' total loss to gambling operations. It was found that Kentucky residents lost a total of $290 million on Stars -- but laughably these same players' winnings were ignored! Thus, a guy who lost a $1000 pot and then won a $3000 pot would still be considered a $1000 loser! After tripling the amount, it became $870 million, and Kentucky won the lawsuit in 2015.

- The state Court of Appeals struck it down in 2018.

- The state Supreme Court just reversed the appeal, and Pokerstars is back on the hook -- including another $330 million of interest, for a total of $1.2 BILLION!

- Pokerstars claims they are going to fight this, but it's not clear how, given that this was a state Supreme Court ruling


Pokerstars actually only raked $18 million from Kentucky residents, which makes this judgment pretty outrageous.

[Dan Druff]

BUMP AGAIN

Pokerstars just lost the appeal, and it looks like $100m in bonds which Pokerstars put up in escrow are about to be seized. Then they'll still be on the hook for another $1.2 BILLION!

Uh oh!

https://www.pokernewsdaily.com/flutt...-action-34381/

This can be a yuuuuuuuuuuuuge problem.

It's possible the US Supreme Court will hear the next appeal, but not that likely. If that fails, then it's a done deal. Pretty damn unfair, to be honest, but this is the chance Pokerstars took by operating illegally for 4 1/2 years.