Flutter shares fall after $870m ruling handed down by Kentucky Supreme Court
Shares in Flutter Entertainment, the parent company of Paddy Power and Sky Bet, fell on Friday after a court in the US state of Kentucky hit the firm with an $870 million (£643m/€710m) judgement.
Flutter said it was "wholly surprised" by the judgement and disputed the basis of the ruling.
The case stems back to the period between 2006 and 2011 when a company called Oldford hosted online poker in Kentucky which generated gross revenues of $18m.
Oldford was subsequently bought by The Stars Group (TSG), which merged with Flutter Entertainment last year.
Legal proceedings were brought in 2010 by the Commonwealth of Kentucky seeking to recover the losses of the state's residents.
In 2015 a Kentucky trial court judge awarded damages against The Stars Group but that was overturned by the Kentucky Court of Appeals in 2018.
However, the Kentucky Supreme Court has reinstated the judgement and also ordered that Flutter pay compound interest of 12 per cent a year on the amount.
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Reacting to the judgement, Flutter said in a statement on Thursday night: "There are a number of legal processes available to Flutter and, having taken legal advice, Flutter is confident that any amount it ultimately becomes liable to pay will be a limited proportion of the reinstated judgement.
"Flutter is wholly surprised by today's ruling and strongly disputes the basis of this judgement which, it believes, runs contrary to the modern US legal precedent."
Flutter added: "Together with its legal advisers Flutter is currently reviewing its position. No liability was previously recognised by either TSG or Flutter in relation to this. Flutter's balance sheet remains robust."
'An unwelcome development for Flutter'
The company's share price ended Friday down 3.81 per cent at 14,900p.
Gavin Kelleher, gaming and leisure analyst with Goodbody stockbrokers, said in a note: "This court ruling is an unwelcome development for Flutter as this was an issue that appeared to be previously resolved with no liability outstanding.
"The company appears confident that it will not have to pay the full outstanding amount of the claim, which based on actual revenues from the state seems overly onerous."
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