PokerStars has voluntarily dropped its claim for damages against Gordon Vayo in exchange for Vayo amending the prior dismissal of his probably fraudulent lawsuit against PokerStars.

PokerStars’ parent company, Rational?Entertainment Enterprises Limited (REEL), had claimed at least $280,000 in damages from American poker professional Gordon Vayo for attorneys’ fees and other costs. The case involved the deceptive use of a VPN (virtual private network), as part of a December 4 joint filing in the case that originally pitted Vayo against PokerStars over nearly $700,000 in frozen online-tournament winnings.

REEL dropped the claims for damages only after Vayo agreed to amend the previous dismissal of his own claims against REEL and Stars. Vayo quickly dropped his original lawsuit after PokerStars uncovered significant evidence of fraud and forgery.

The forged evidence, including bank and utility statements, purported to show that Vayo was in Canada when he won roughly $700,000 in a 2017 Spring Championship of Online Poker (SCOOP) event on PokerStars. However, the evidence Stars obtained made all but certain the reality that Stars was playing from California, in violation of PokerStars’ terms of service.

Dismissed “with prejudice”

The amended dismissal agreed to by Vayo is the dropping of the claim with prejudice, which means that Vayo cannot refile the same or a similar claim at a later date. The December 4 filing, made in the US District Court for the Central District of California, where the case was filed, is among the briefest filings in the case to date. The following is the complete body of text of the filing:

Plaintiff Gordon Vayo and specially appearing Defendant Rational?Entertainment Enterprises Limited (“REEL”) (collectively, the “Parties”), by and?through their respective counsel, hereby stipulate, agree, and request as follows:

1. This action is hereby dismissed with prejudice by Plaintiff Gordon?Vayo.
2. The pending Motion for Attorneys’ Fees and Costs by Rational?Entertainment Enterprises Limited d/b/a PokerStars [] is?hereby withdrawn without prejudice.

The joint filing probably ends the formal part of this case. The dropping of the claims by both sides also forestalls a hearing to consider REEL’s countering claims for attorneys’ fees and damages that was scheduled for later in December. REEL and PokerStars were asking for at least $280,000, the bulk of it attributable to the hiring of a California-licensed legal firm to defend PokerStars against Vayo’s claims.

Goodwill and legal exposure

The dismissal of the counterclaims for damages by PokerStars may be perceived as a form of goodwill by the site and company, though a similar offer was made to Vayo’s original attorney when the fraudulent documents were discovered. Instead, that attorney quickly dropped Vayo as a client, while dropping the case without prejudice on Vayo’s behalf. Why the case was at first dropped without prejudice remains undisclosed, though Vayo’s second attorney may have advised him to find a way to resolve the matter quickly.

In the wake of the forgery discovery, both sides had ample reasons to not want to continue the battle. Though REEL was very likely to win its claims for damages, the action would have required the company to continue its battle in a US-based court and jurisdiction where the company suffered a large public-image hit a couple of years ago, when it helped finance a failed effort to bring legalized and regulated online poker to the Golden State.

Likewise, Vayo, a 30-year-old veteran of live and online play who is best known as the runner-up in the 2017 WSOP Main Event, probably did not want the forged documents at the core of his claims evaluated in a formal court trial. Vayo could still face criminal legal exposure from the creation of the forgeries, apart from the civil counterclaims made by REEL and PokerStars. Vayo could also face some form of action from his original counsel, especially if the case was brought on a contingency basis; so-called “fraud exception” rules could apply.