Amaya, the online gaming company that operates PokerStars and Full Tilt Poker, has recently been fined $870 million by the state of Kentucky after a five-year dispute regarding the alleged breach of the state’s anti-gambling laws.
Judge Thomas Wingate ruled on the 23rd December 2015 in favour of Kentucky in the state’s lawsuit against Amaya Inc., decreeing that the gaming corporation should pay the state a total of $870m for violating its gambling restrictions. Kentucky sought funds spent by its residents on the PokerStars site between 2006 and 2011, despite the Unlawful Internet Gambling Enforcement Act (UIGEA) having come into force. During these five years, it is alleged that the now Amaya-owned PokerStars ignored the UIGEA and subsequently provided gambling services to over 34,000 Kentucky online poker players. Amaya was initially ordered to pay $290 million to Kentucky state government for this offence, despite their claims that the company only earned a gross revenue of $18 million from Kentucky players during this period – a fraction of the total Kentucky government was demanding.
This figure was then recently tripled to $870 million in damages, following a request from the Kentucky state, for the illegal operations allegedly carried out by PokerStars between 2006 and 2011. Kentucky has argued that it is permitted to seek damages under a 19th century statute that allows it to seek reparations on behalf of the poker players who lost money. None of the $870 million however will go towards former players of the site, rather it will be received by the Kentucky state government.
The Amaya group purchased PokerStars last year, and has been ordered to pay 12% interest per year (an additional $104 million annually) on the $870 million until the entire debt is paid off in full. The company has promised to appeal the charges against it and “dispute any liability that may be ordered at the trial”. It is confident that there are compelling arguments to be made in the company’s favour.
Judge Wingate finished his ruling by declaring that “such is the consequences for violating the laws of Kentucky.”
