Flutter Entertainment has made an announcement stating that it has paid $300 million to the Commonwealth of Kentucky and now considered the issue as resolved. The statement also stated that the group considers this resolution as the best possible outcome with respect to the interests of the shareholders. As part of the dispute resolution, the gambling and betting operator has paid $200 million to the state of Kentucky. Additionally, $100 million, a prior payment with respect to a superseded bond has also been paid.

Cause of legal issue

The legal issue between the operator and the state was related to the Stars Group that was acquired by the company in 2020. The state authorities claim illegal operations under the provisions of the Unlawful Internet Gambling Enforcement Act between 2006 to 2011. The authorities in the state were keen to recover the alleged losses to the residents in the state of Kentucky while playing poker for real money on PokerStars, a Star Group game between 2006 to 2011. The authorities had also moved to recover the money under the Loss Recovery Act that would allow the courts in the state to seize illegal revenue from gambling.

Legal Battle

The first verdict in the legal issue came in December 2015 that Star Group lost and an award of $290 million was set by the judge. The award was later set at $870 million that excluded the interest portion and applicable costs. The gross revenue of the operator was about $18 million from 2006-2011.  PokerStars has claimed that online betting could be considered a legal grey area under the provisions of the Unlawful Internet Gambling Enforcement Act.

In the meanwhile, Flutter had initiated various legal appeals against the aforesaid verdicts with respect to its subsidiary.  Even as the $870 million fine was dismissed, it was reinstated by a verdict of four to three by a Kentucky court. Annual compound interest was also awarded at a rate of 12% per year. The damages were therefore estimated to be at $1.3 billion. The appeal to the Kentucky Supreme Court was dismissed and Flutter had filed an appeal with the Supreme Court of the United States of America earlier in the year.