This is a very good point by her attorney. If they claim she was playing a broken machine then all previous players should sue them and say they were not informed the machine was broken when they played and lost and all bets on that machine for the night should be returned to players.
If they settled out of court it means they offered her some real money not a stake dinner. If I were in her place I'd tell them that either they pay me 10% of the win, or we'll go to court and the whole world will know how they treat their clients. Even if I ultimately lose this will destroy their business because nobody will want to play in a place where every win can be blamed on a malfunction.
What if I won 1 million instead of 43? would that be a malfunction?