Franklin County judge awards $870 million to state in online gambling case

A Franklin Circuit Court judge has awarded $870 million to the state in a judgment against an online gambling company that runs the website PokerStars.

Judge Thomas Wingate ruled Wednesday that the state was entitled to triple damages in the 2010 lawsuit against Amaya Inc., the parent company of PokerStars. The state sued the online gambling company, alleging that from Oct. 12, 2006, to April 15, 2011, more than 34,000 Kentucky players lost $5 or more playing poker on its websites. The state sued the companies for operating illegally in Kentucky. Under an 1833 statute, the state argued it was allowed to seek damages on behalf of the poker players who lost money.

Sheryl Snyder, a lawyer who represents Amaya, said Wednesday that Amaya would appeal the award.

“Absolutely, we plan to appeal,” Snyder said. “We think that awarding $870 million against a company that did $18 million in revenue is a total misuse of an anachronistic statute.”

Wingate ruled in favor of the state in August. He issued an order Nov. 20 awarding initial damages of $290 million. Lawyers for the state asked Wingate to reconsider the calculations of how he came to the $290 million judgment in addition to asking Wingate to triple the damages. Lawyers for Amaya also asked Wingate to reconsider his Nov. 20 order.

On Wednesday, Wingate sided with the state, kept the initial judgment of $290 million and said tripling damages was allowed under the law. The total amount Wingate awarded the state is $870,690,233.

Wingate wrote that Amaya might “find the final damage award to be harsh medicine. Such is the consequences for violating the laws of Kentucky.”

Amaya is a publicly traded company. According to court documents, it purchased PokerStars for $4.9 billion in 2014.

In addition to the $870 million award, Wingate set the interest rate at 12 percent annually until the payment is made.

The lawsuit was started under former Gov. Steve Beshear. The Lexington law firm of Hurt, Deckard & May represented the state in the lawsuit.

Jessica Ditto, a spokeswoman for Gov. Matt Bevin said the state was pleased with Wingate’s decision.

“The governor looks forward to discussing with his counsel the strategy going forward,” Ditto said.

Snyder said Amaya would ask Wingate to reconsider portions of his decision. But the issue probably will end up in the state Court of Appeals or state Supreme Court. That means a final decision might not be reached for several years.

The 1833 statute allows a third party to sue to recover gambling losses if a gambler does not sue himself within six months of the loss. Lawyers for Amaya have argued the state is not a third party and cannot sue for the losses. The state has argued that it can under the statute.

A group of poker players recently filed a motion to intervene in the case, saying they are entitled to part or all of the judgment. Lawyers for the state have argued the poker players have known about the lawsuit since 2010 and filed their motion to intervene specifically to help Amaya. Wingate has not ruled on that motion.

Beth Musgrave: 859-231-3205, @HLCityhall