Amaya to appeal ruling by Kentucky trial court
27 December 2015
(PRESS RELEASE) -- Amaya Inc. on Thursday announced it will appeal a judgment issued by a state judge in the Commonwealth of Kentucky and will avail itself of any and all remedies available to it.
The litigation was filed by the Commonwealth of Kentucky in 2010 and sought recovery of alleged losses by Kentucky residents who played real-money poker on PokerStars' website during a period between 2006 and 2011. In the decision, the judge imposed an approximately $290 million award, which he trebled to approximately $870 million excluding interest and applicable costs, in favor of the Commonwealth. The latest ruling is in stark contrast to the same trial court's decision just last month when it determined that damages should be based on the net losses of players. Wednesday's order applies a methodology that is not grounded in applicable law as it calculates damages based on gross losses of players without any reduction for winnings, bonuses or free play.
"This is a frivolous and egregious misuse of an antiquated state statute to enrich the contingent-fee plaintiff's attorneys hired by the Commonwealth and not the people of Kentucky," said Marlon Goldstein, Executive Vice President, Corporate Development and General Counsel of Amaya. "Given that PokerStars only generated gross revenues of approximately US$18 million from Kentucky customers during the five years at issue, a damages award in excess of US$800 million is notable only for its absurdity."
To bring the action, Kentucky relied on a centuries old statute that was intended to allow individuals who incurred gaming losses to sue their opponents; it was never intended to authorize the Commonwealth to sue and collect such losses for its own benefit. In fact, no other state in the union has brought an action under this type of antiquated statute to recover alleged gaming losses in the name of a state.
Amaya intends to post a bond to stay the enforcement of the order and to appeal in early January. The appeal will, among other arguments, raise factual and legal errors (including violations of the state and federal constitutions) that include, but are not limited to, the trial court's ruling permitting the Commonwealth to assert standing, its failure to find facts that give rise to the violation of the statute, its clearly erroneous decisions of law, and its failure to properly apply the law to the facts. Amaya will also vigorously challenge the trial court's calculation of alleged gaming losses, which was based on an improper reading of a 100-year-old leading appellate decision.
Regardless of the dollar amount, to the extent the PokerStars entities may be ultimately obligated to pay any amounts following exhaustion of all appeals and other legal remedies, Amaya intends to seek recovery against the former owners of the PokerStars business.
Amaya has been a leader in promoting the regulation of online gaming in the United States. Earlier this year, following an extensive review, Amaya received approval to begin operating its PokerStars brand in the regulated market of New Jersey, which it plans to launch in the first half of 2016. PokerStars is the world's most licensed and heavily regulated online gaming brand.