by Luke Pluta-Ehlers*
For the bulk of American history, most forms of gambling have been illegal or heavily regulated. To further deter unlawful gambling, 30 states have passed Loss Recovery Acts (“LRAs”), which allow the loser of an illegal gambling transaction to sue the winner. Some states’ LRAs go further, allowing a third party to sue for doubled or tripled damages if the loser does not bring suit. One such state is Kentucky. In 2020, the Kentucky Supreme Court decided Commonwealth ex rel. Brown v. Stars Interactive Holdings, ruling that the state of Kentucky qualified as “any other person” and could thus sue for treble damages under the state’s LRA. The court reasoned that because the state has exclusive domain over prosecuting criminal cases, the state should not be presumed excluded from the group of persons with standing to sue under the LRA. This Contribution argues that the appellate court decision overturned by the Kentucky Supreme Court better handled the novel question of whether a state can sue under an LRA. The appellate court’s approach was more in line with the cautious manner in which other courts have interpreted who can sue and be sued under penal qui tam gambling statutes. Further, this Contribution argues that permitting a state to sue under an LRA is a troubling grant of authority, as it allows the state to delegate and pursue enforcement of its criminal laws under the more generous standard of a civil lawsuit. This Contribution briefly discusses the history of LRAs, compares the holdings of the Kentucky appellate court and Supreme Court, and explains why the appellate court better examined the state’s role in law enforcement via a penal LRA.