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Editor’s Note: This story was updated with comments from Kentucky’s governor and state Representative Andy Koenig as of 15:47
Flutter Entertainment, parent of FanDuel and Sky Bet, said it has reached a $300m settlement with the state of Kentucky, ending an effort by the company to have the U.S. Supreme Court overturn a court order to pay $1.3bn over alleged losses incurred by Kentuckian PokerStars players before 2011.
Flutter said it has agreed to pay Kentucky $200m (£146.5m), plus $100m it previously forfeited to the state as part of a bond in the case.
In return, Kentucky will drop all claims, the London-listed operator said.
“The group strongly believes that this agreement is in the best interests of Flutter shareholders,” the company said in a statement. “The group now considers the matter closed.”
“After 10 long years, the commonwealth has not only prevailed, but collected dollars that the General Assembly will be able to direct to critical areas, like education, health care and economic development,” Governor Andy Beshear, a Democrat, said in a statement Wednesday.
Republican state Representative Andy Koenig, who has sponsored multiple bills to legalize online poker and sports betting in Kentucky, said he was “glad that this issue is behind is and the state coffers will benefit.”
“The time has come to bring these activities out of the shadows and ensure that Kentuckians who wish to play online poker can do so in a safe and regulated way,” Koenig told VIXIO GamblingCompliance.
Koenig also confirmed Wednesday that he plans to reintroduce a bill next year that is “substantially similar to previous bills” he has filed that would make poker plus land-based and mobile sports betting legal in the commonwealth.
Earlier this year, Koenig's House Bill 241 was put on hold as historical horseracing was the top priority for lawmakers in Frankfort.
The state’s case centred on alleged losses suffered by Kentucky-based poker players on the PokerStars website between 2006 and 2011.
Last December, the Kentucky Supreme Court ruled that Flutter had to pay $870m in damages plus 12 percent annual interest, bringing claims to $1.3bn.
Flutter had acquired PokerStars and Stars Interactive Holdings in 2019, inheriting the claims against the online poker company.
Flutter had argued in court that PokerStars made just $18m in rake fees from players based in Kentucky during the period, with the rest of the sums based on the amount the players lost to each other.
The judgment was initially brought against PokerStars and Stars Interactive in 2015 after a state circuit court found the company liable for some $290m in Kentuckian pokers players' losses and agreed to award the commonwealth treble damages.
The claim argued that PokerStars illegally offered online poker games to 34,000 Kentucky residents over the four and a half-year period to April 2011, when the company was forced to withdraw from the U.S. in the so-called “Black Friday” crackdown on online gambling.
Kentucky’s case relied on an 18th-century law that Flutter claimed had not been utilized in 60 years.
In a recent filing to have the U.S. Supreme Court review the case, Flutter had argued that the potential damages payout would constitute a “grossly excessive punishment” in violation of the U.S. Constitution's 14th Amendment and “excessive fines” provision of the 8th Amendment.
Flutter operates Paddy Power and Betfair brands in the UK, along with Sky Bet, Sportsbet in Australia, Adjarabet in Georgia and PokerStars in many markets. Its U.S. brands include TVG, FanDuel and FoxBet, as well as regulated PokerStars sites launched in New Jersey, Michigan and Pennsylvania.
