PokerStars Secures Victory In Illinois Loss Recovery Action
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PokerStars Secures Motion To Dismiss In Long-Running Illinois Loss Recovery Case

Case dismissed
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PokerStars appears to have laid to rest a long-running legal dispute in Illinois after Judge David R. Herndon granted the company’s motion to dismiss a second amended complaint filed by Kelly Sonneberg and Casey Sonnenberg.

Read the decision here.

Herndon simultaneously dismissed a companion claim brought by separate defendants against Full Tilt.

“This is a significant win for PokerStars,” stated lead counsel for PokerStars, Jeff Ifrah of Ifrah Law.

“In what is a traditionally plaintiff-friendly court, the judge dismissed with prejudice the outlandish claims of two defendants who were motivated to file by their mothers. Helicopter parenting doesn’t fly in the Seventh Circuit and our client is delighted to put this nonsense behind them.”

The dismissal was widely anticipated after Judge Herndon’s decision last March to dismiss the class action complaint brought by Kelly Sonnenberg. The claim dismissed today was an amended version of that complaint.

Claim based on loss recovery statute

The Sonnenbergs were seeking damages from PokerStars based on an Illinois statute that allows recovery of losses stemming from illegal gambling.

Illinois is one of several states with such provisions in their gambling law. For example, a similar statute in Kentucky formed the basis of a $15mm settlement reached by and complaintants.

But the successful application of such statutes to poker, where, unlike casino games, the house has no direct stake in the outcome of a game and does not collect “winnings” per se’, would have dramatically broadened the reach of loss recovery laws.

Logic behind the decision

Judge Herndon cited various elements of the case in articulating his decision, starting with a failure to plead loser / loss:

First, defendants argue that plaintiffs fail to identify a loser or a loss. Specifically, defendants argue that other than identifying Casey Sonnenberg as a purported loser, plaintiffs failed to identify a single cognizable loser or a loss in that the second amended complaint does not plead basic facts, including: when the purported loss was incurred, to whom (i.e. which player) the loss was sustained, and what is the amount of the loss in question […] The Court agrees with defendants and again finds that plaintiffs have failed to plead both loser and loss sufficiently.

Then moving to issues with time frame:

Section 8(b) of the LRA plainly states that a non-loser plaintiff does not have a cause of action until the gambling loser has failed to bring suit within six months of the loss. Plaintiffs cannot allege the six months have passed or that they timely brought the claim without alleging the date of a loss and the amount of the loss. Thus, plaintiffs must allege that a specific loser lost a certain amount of money on a certain date. Plaintiffs have failed to do that in their respective counts. The Court notes that plaintiffs’ second amended complaint does not contain one date establishing the time frame as to when the conduct allegedly took place […] The failure to plead the specific elements is fatal to plaintiffs’ claims as the Court finds that allowing plaintiffs to amend their allegations another time would be futile.

And then to the issue of whether taking a rake is tantamount to “winning“:

Here, the Court finds that plaintiffs have added self-serving conclusory allegations that defendants won money by taking “rake” in order to withstand dismissal. The Court finds that these new allegations are boilerplate and insufficient to establish a winner. Further, there are no allegations that defendants won Casey Sonnenberg’s money. Plaintiffs’ second amended complaint fails to plead that defendants participated in the games by placing bets or wagers, won bets or wagers, or risked any of their own money. In fact, plaintiffs offer contrary allegations stating that “other individuals won money from Illinois gamblers during poker games hosted by the Defendants.” (Doc. 71; pg. 11, ¶ 37). Again, based on the allegations in the second amended complaint, the Court finds that defendants were more akin to a third party service provider that provided a forum for others to play games and did not have a stake in how the games were decided/won.

Before concluding with an analysis of the statute of limitations for loss recovery cases:

The LRA only contains one statute of limitations: a six month time frame for the “loser” to bring a claim for recovery of the loss and after that time frame may a non-loser plaintiff bring a claim for the loss. This language has been interpreted as imposing a 6-month statute of limitations on the “loser’s” right to recover monies paid under 5/28-8(a).  […] As such, April 15, 2011, was the last conceivable date on which any “losers” could have sustained any gambling losses. The original complaint in this case was filed on August 24, 2012 (almost 15 months after the gambling site was shut down) (Doc. 4-4). Thus, for plaintiffs’ loser claims to be timely, plaintiffs should have brought their claims well before August 24, 2012, at least by October 10, 2011 for the “loser” claims, and they did not. Thus, their loser claims are also time barred under 720 ILCS 5/28-8(b).

Read the decision here.

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Chris Grove
- Chris is the publisher of Grove also serves as a consultant to various stakeholders in the regulated market for online gambling in the United States.