Flutter Entertainment got lucky recently when it avoided what could have been a multibillion-dollar payment demanded by Kentucky. The state had gone after PokerStars in court for illegally offering its services in the state years ago, before it was purchased by Flutter, and the amount requested in damages continued to pile up over the years. The case came to a close last month after Flutter and Kentucky came to an understanding. While Flutter may have felt somewhat vindicated by not having to pay the massive amount expected, the true winners were the lawyers that represented the state.
Kentucky Scores Huge Payday
The fight between PokerStars and Kentucky had begun more than a decade ago and Flutter had sought to put the issue to rest a couple of times. It finally managed to find success late last month and agreed to make restitution in the amount of $300 million. $100 million had already been paid through a prior arrangement, with Flutter now having to give up $200 million to make the battle go away for good.
Any time a government can pick up some extra money, it’s a good thing, as long as the money is used for a good cause. Kentucky Governor Beshear said that this would happen with the Flutter payday and a statement released from his office after Flutter and the state shook hands indicated that the settlement was “$300 million that the General Assembly will be able to direct to critical areas, like education, health care and economic development.” The statement was partially true, but not all of the money will go to those targets.
Kentucky Lawyers Score Bigger Payday
The law firm that represented the state, Hurt, Deckard & May, is entitled to 25% of the proceeds, according to media outlet Lexington Herald Leader. In 2008, attorney Jim Deckard had signed a contract with the administration of former Governor Steve Beshear, the current governor’s father, to lead the fight and, now that it has come to an end, it stands to collect $75 million. Based on the length of the case, that’s income of about $5.7 million a year over the past 13 years.
The lawyers risked a lot, as well, since they would only be paid if the state won. They were responsible for covering all of the costs of the case from beginning to end, with their percentage being provided only if Kentucky won its case. It was a win-win for the state since it didn’t incur any undue financial burdens, and was able to pick up free cash if it won.
The lawyers would have much likely preferred to see the $1.3 billion that could have been awarded. However, they still picked up a nice paycheck. Of course, unless there was some fine print or other stipulation in the contract, Kentucky will be entitled to another cut of the money, as the state imposes a flat 5% tax rate on income.