Kentucky legal firm scores bumper payday from Flutter settlement
State lawyers to take $75m chunk of nine-figure arrangement to settle historic PokerStars legal case under ‘no win no fee’-style contract
Flutter Entertainment’s $300m settlement of its 13-year legal battle with the US State of Kentucky has resulted in Bluegrass State officials being served with a $75m legal bill.
In September, the FTSE 100 operator settled its long-standing dispute with Kentucky authorities over alleged historic illegal gambling relating to the PokerStars business.
Flutter agreed to pay $200m to the Commonwealth of Kentucky in addition to $100m previously forfeited to the state as part of the supersedeas bond in the case.
In return, state officials agreed to cease all further actions with respect to the case. Kentucky Governor Andy Beshear confirmed that the $300m would be directed to causes in the state including education, healthcare, and economic development.
Acting for the state in the 13-year legal dispute was Lexington-based legal firm Hurt, Deckard & May (HDM).
According to the Lexington Herald-Leader, the firm will receive $75m of the $300m settlement, based on a 2008 agreement made between HDM partner Jim Deckard and then state Governor Steve Beshear, the father of the current state governor.
The arrangement is understood to entitle the firm to a 25% contingency fee, similar to the ‘no win no fee’ legal agreements popularised by legal firms in the UK.
In this case, HDM’s contingency fee included it covering all case preparation, salary, and court costs, subject to the proviso that it would be reimbursed if the state was successful in its claim.
In December 2020, the Kentucky Supreme Court reinstated a prior 2015 ruling against former owners The Stars Group (TSG) over the operation of the PokerStars brand, a case which Flutter later took up following its £10bn mega-merger with TSG in May of that year.
The ruling, made in the Franklin Circuit Court, charged TSG with historic violations of the Unlawful Internet Gambling Enforcement Act (UIGEA) between 2007 and 2011 and ordered the operator to pay $870m in damages.
The Franklin Circuit Court ruling had previously been overturned in December 2018 following an appeal by TSG against the decision in the Kentucky Court of Appeals.
The $870m was later increased to $1.3bn, considering compound interest between the time of the 2015 ruling and its eventual reinstatement in 2020.
In its petition for a US Supreme Court review of the case, Flutter decried the “monstrous” calculation amount suggesting the state had manipulated a “centuries old statute” in the Kentucky Loss Recovery Act to pursue the case.
However, the Supreme Court failed to review the case following the agreement of the $300m settlement.