Flutter Settles $300m Kentucky Dispute
Owner of the popular PokerStars brand Flutter Entertainment has finally reached a conclusion to its long-lasting legal dispute with the US state of Kentucky. It has agreed to pay a $200 million settlement to the state to close the matter, along with an additional $100 million which was previously forfeited to the Commonwealth.
Flutter Entertainment has finally reached a conclusion to its long-running legal dispute with the US state of Kentucky. It will pay a $200 million settlement to the state, thereby closing the matter. ©mohamed_hassan/Pixabay
Dispute Dates All the Way Back to 2015
The operator of the highly popular PokerStars brand, Flutter Entertainment, has provided an update to its long-running legal dispute with the Commonwealth of Kentucky.
In order to put an end to the battle, Flutter has revealed that it will pay a $200 million settlement to the state of Kentucky. Furthermore, it will pay an additional sum of $100 million which had already been forfeited to the Commonwealth due to the presence of a supersedeas bond in the legal case.
The origins of this years-long dispute date all the way back to 2015. This moment in time saw PokerStars ordered to pay a $290 million penalty by Franklin Circuit Court Judge Thomas Wingate. This stemmed from allegations claiming that the provider supplied illegal gambling offerings to players in Kentucky between October 2006 and April 2011.
Kentucky Supreme Court Reinstated Judgement in 2018
The Supreme Court of the state of Kentucky was not, however, going to stop there: it increased the penalty fee owed by Flutter to $870 million after it reinstated its judgement in 2018. The justification for this increase was due to the implementation of a 12% per annum to the initial sum.
The fine was subsequently thrown out by the Court of Appeals the following year in 2019. The Commonwealth of Kentucky then decided to appeal the decision. This prompted the legal dispute to reach an entirely new level earlier this month in September 2021: the United States Supreme Court.
The result, however, was decidedly less exciting, as parties eventually agreed to settle outside of court. A statement from gambling provider Flutter Entertainment justifies the out of court settlement as being in the best interest of everyone involved:
“The group strongly believes that this agreement is in the best interests of Flutter shareholders. The group now considers the matter closed.”
Also worth noting is that The Stars Group was taken over by Flutter Entertainment in May 2020. And despite being based in the United Kingdom, Flutter owns and operates a plethora of different brands, including Paddy Power, Betfair, FanDuel, FoxBet, and much more.
Flutter Joins EU Safer Play Association
In other recent news, Flutter decided to hop on the bandwagon earlier this month and is following a conglomerate of companies partnering with the European Union’s gambling board to promote a ‘Safer Play’ campaign.
The campaign comes as part of the European Union’s increased efforts to promote safer gambling practices across the continent, particularly in response to increased gambling activity prompted by widespread lockdowns due to the ongoing coronavirus (Covid-19) pandemic.
Flutter Entertainment is joined by Paddy Power, PokerStars, Sky Bet and Betfair, which are some of the continent’s most renowned and highest rated betting platforms. The inclusion of such operators is a conscious move on the part of the EU gambling association, as it wants to recruit the continent’s most reputable and well-known brands in order to help increase awareness surrounding the campaign.
Because Europe boasts some of the world’s strictest gambling measures, the continent experiences some of the lowest problem gambling rates globally. In addition to this, all officially licensed betting operations in Europe must pass through the EU’s unified gambling association, thereby centralizing the regulation process.
Covid-19 Lockdown Saw Flutter Revenue Grow
Despite widespread shutdowns due to the outbreak of the novel coronavirus (Covid-19) pandemic in 2020, Flutter Entertainment’s products ended up performing particularly well during the first half of the year.
The UK-based provider reported that its EBITDA (earnings before interest, taxes, depreciation, and amortization) grew by 35% last year up to £684 million. This should not come as a huge surprise given that, following its £9.1 billion merger with The Stars Group, Flutter stands as one of the largest, if not the largest, gambling companies worldwide.
In a shared statement, the company’s chief executive Peter Jackson reinforced what has already been observed time and again during the coronavirus pandemic — customers shifted their sports betting practices towards poker and online casino games instead:
“In the period prior to Covid-19 related disruption, our businesses performed well with strong customer growth and favorable sports results. In the period thereafter, the cancellation of sports and closure of our shops led to reduced sports revenues in the UK and Ireland. However, this was more than offset by an increase in the number of recreational customers playing our poker and gaming products globally, as people sought new forms of home entertainment.”– Peter Jackson, Chief Executive, Flutter Entertainment
