TORONTO, Dec. 21, 2018 /CNW/ - The Stars Group Inc.
(Nasdaq: TSG; TSX: TSGI) today announced that the Kentucky Court of Appeals has ruled in its
favor and reversed in its entirety the $870
million judgment issued against it by a trial court judge in
December 2015. The Court of Appeals
stated "[a]llowing a complaint, like the one put forth by the
Commonwealth, to move forward would lead to an absurd, unjust
result."
"We applaud the decision of the highly-respected three-judge
panel of the Kentucky Court of
Appeals," stated Marlon Goldstein,
Executive Vice President & Chief Legal Officer of The Stars
Group. "The merits of the case prevailed and we look forward to
putting this matter behind us as we sharpen our focus on executing
on our growth strategy going forward."
The litigation that is subject to the appeal was initially filed
by the Commonwealth of Kentucky in
2010, approximately four years prior to The Stars Group's
acquisition of the PokerStars business, and sought recovery of
alleged losses by Kentucky
residents who played real-money poker on PokerStars' website during
a period between 2006 and 2011. To bring the action, Kentucky relied on a centuries old statute
that was intended to allow individuals who incurred gaming losses
to bring an action against their winning opponents, but was never
intended to authorize the Commonwealth to sue and collect such
losses from the operator of the games for the Commonwealth's own
benefit.
As a result of the ruling, The Stars Group intends to petition
for the release of the $100 million
supersedeas bond posted by it to stay enforcement of the trial
court's order during the pendency of the appeals process, which
includes$5 million in cash collateral and $65 million in letters of credit securing the
same.
As previously disclosed, approximately $300 million continues to be held in an indemnity
escrow fund established under the merger agreement governing The
Stars Group's acquisition of the PokerStars business. The Stars
Group previously filed an indemnification claim relating to the
Kentucky litigation, which is
currently pending against the sellers of the PokerStars business,
for all losses, costs and expenses related to the litigation. This
claim and the release of the outstanding escrow funds will be
resolved in accordance with the provisions of the merger and escrow
agreements related to the acquisition. There can be no assurance
that such claim will result in any amounts in the escrow fund or
otherwise being remitted to The Stars Group or that any of The
Stars Group's estimates of potential losses will reimbursed by the
sellers or otherwise.
The Stars Group expects the Commonwealth to either petition the
Court of Appeals for a rehearing or seek discretionary review of
the Court of Appeals decision by the Kentucky Supreme Court and
intends to vigorously dispute any and all liability in the event
the Kentucky Supreme Court grants review and hears the appeal.
About The Stars Group
The Stars Group is a provider of technology-based product
offerings in the global gaming and interactive entertainment
industries. Its brands have millions of registered customers
globally and collectively are leaders in online and mobile betting,
poker, casino and other gaming-related offerings. The
Stars Group owns or licenses gaming and related consumer businesses
and brands, including PokerStars, PokerStars Casino, BetStars, Full
Tilt, BetEasy, Sky Bet, Sky Vegas,
Sky Casino, Sky Bingo, and Sky
Poker, as well as live poker tour and event brands, including the
PokerStars Players No Limit Hold'em Championship, European Poker
Tour, PokerStars Caribbean Adventure, Latin American Poker Tour,
Asia Pacific Poker Tour, PokerStars Festival and PokerStars
MEGASTACK. The Stars Group is one of the world's most licensed
online gaming operators with its subsidiaries collectively holding
licenses or approvals in 21 jurisdictions throughout the world,
including in Europe, Australia, and the Americas. The Stars Group's
vision is to become the world's favorite iGaming destination and
its mission is to provide its customers with winning moments.
Cautionary Note Regarding Forward Looking Statements and
Other Information
This news release may contain forward-looking statements and
information within the meaning of applicable securities laws,
including, without limitation, as it relates to the Kentucky litigation as well as certain
future growth expectations of The Stars Group. Forward-looking
statements can, but may not always, be identified by the use of
words such as "anticipate", "plan", "continue", "estimate",
"expect", "may", "will", "intend", "could", "might", "would",
"should", "believe", and similar references to future periods or
the negatives of these words and expressions. These statements are
based on management's current expectations and are subject to a
number of risks, uncertainties, and assumptions, including legal
proceedings, market and economic conditions, business prospects or
opportunities, future plans and strategies, projections,
technological developments, anticipated events and trends and
regulatory changes that affect The Stars Group, its subsidiaries,
and its and their respective customers and industries. There can be
no assurance that actual results will not differ materially from
those expressed or implied in forward-looking statements. Undue
reliance should not be placed on forward-looking statements. Please
refer to The Stars Group's most recent annual information form and
annual and interim financial statements and management's discussion
and analysis for more information about the factors, assumptions
and risks that may apply to The Star's Group's forward-looking
statements. Each forward-looking statement speaks only as of the
date hereof, and The Stars Group undertakes no obligation to
correct or update any forward-looking statement, whether as a
result of new information, future events or otherwise, except as
required by applicable law.
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SOURCE The Stars Group Inc.