Take a step back in time to 2012, shortly after PokerStars and Full Tilt Poker were eradicated from the US market by the heavy hand of the Justice Department. That year, two Illinois families filed litigation against the online poker operators, seeking recuperation of losses incurred by their sons from ‘illegal gambling’. On Tuesday, a Seventh Circuit Court denied those claims, ruling in favor of Amaya Gaming.
Kelly Sonnenberg and Judy Fahrner are of the respective mothers of Casey Sonnenberg and Daniel Fahrner, two young men who partook in real-money online poker activities at PokerStars and Full Tilt Poker prior to their being shut down in April 2011. Both sons lost money, and both mothers chose to sue the operators for recovery of those losses.
Amidst a lengthy pile of Illinois’ constitutional bylaws is an antiquated piece of legislation called the Illinois Loss Recovery Act (ILRA), which states:
“Any person who by gambling shall lose to any other person, any sum of money or thing of value, amounting to the sum of $50 or more and shall pay or deliver the same or any part thereof, may sue for and recover the money or other thing of value, so lost and paid or delivered, in a civil action against the winner thereof, with costs, in the circuit court…”
Based on that archaic text, the Sonnenberg and Farhner families filed litigation against PokerStars and Full Tilt Poker. Illinois’ lower courts initially rejected the claim, stating that the 6-month window for filing had expired.
The families appealed the ruling in the Seventh Circuit Appellate Court, which upheld the initial ruling this week, based primarily on the fact that Amaya Gaming – which inherited the lawsuit when it acquired both online poker sites in 2014 – was not the “winner” of the incurred losses.
“Their problem is that the defendants are not the winners of any game that any of the plaintiffs (or their sons) played,” wrote Judge Richard Posner on behalf of the three-judge panel. Referring to the ‘rake’ collected by the online poker rooms, he said “charging a fee for engaging in gambling is not the same as winning a gamble; a croupier who supervises a casino’s poker game is not a gambler, let alone a winner.”
Judge Criticizes Outdated IRLA
The six-page ruling denounced the lawsuit, and the ILRA in general, stating that recovery of such losses would only encourage more Illinois residents to gamble online, safely assured that “gamblers couldn’t lose any money there because the hosts of the websites would have to reimburse any losses they incurred.”
The Judge also noted the timeworn text of the IRLA as being from “an era of strong opposition in Illinois to gambling. That era has ended, and the laws are gradually being relaxed,” he wrote.
“Creating legal remedies for gambling losses as a way to discourage gambling seems a lost cause, since the usual gambling ‘loss’ is not a real loss,” Judge Posner continued. “A gambler knows that the money he puts in the pot is at risk. It is not a risk he has to take; he takes it because he hopes to win the pot, or simply because he likes gambling or risk taking in general.”
Amaya’s Battle Rages On in Kentucky
Amaya was surely pleased with the outcome in Illinois, and is hoping for a similar ruling in an existing appeal case in Kentucky. In November, the Commonwealth was awarded $870 million (triple the $290 million said to have been lost by Kentuckians to Amaya Gaming’s online poker operations) in loss recovery.
That ruling was based on a similarly archaic law relating to reimbursement of gambling losses in Kentucky. However, in this case, it’s not the players suing for losses, but rather the state. If won, that money won’t be going back to the players either, but rather to supplement a substantial budget deficit.
Amaya Gaming said that it expects to win the appeal, but that if the courts rule against them, they will be filing their own litigation against Isai and Mark Scheinberg – the owners of PokerStars when the lawsuit was filed – to pay the debt.