Casinos Approved for Class-Action Suit Against Light & Wonder

Posted on: December 18, 2024, 07:47h. 

Last updated on: December 19, 2024, 09:55h.

Todd Shriber Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

An arbitrator ruled that more than 100 casinos pursuing litigation against gaming device manufacturer Light & Wonder can be joined as a single class.

Scientific Games lawsuit settlement
A dealer dealing cards from a shuffling machine. An arbitrator ruled a class-action case against Light & Wonder over a purported card-shuffling device monopoly can be certified. (Image: Lloyd Fox/Baltimore Sun)

American Arbitration Association (AAA) arbitrator John Wilkinson made the decision last week and his ruling was published Wednesday, confirming the casinos can move forward as a single class in a suit against Light & Wonder that contends the company leaned on faulty patent claims to establish a pseudo monopoly in the market for card-shuffling machines. Light & Wonder argued that each plaintiff’s claims are too different to allow the class to be certified. Wilkinson disagreed.

Class arbitration is by far the fairest and most efficient method for resolving the antitrust claims of proposed class members,” he wrote in his decision.

The original litigation was brought in 2020 by the Tonkawa Indians of Oklahoma, a tribal casino operator that claimed Scientific Games Corp. was overcharging casino operators for card-shuffling devices. In that suit, the tribe asserted that Scientific Games exerted a monopoly over that niche, stifling competitors and all but forcing casino operators to buy the company’s products. Scientific Games was the name Light & Wonder used until 2022.

Individual Litigation Not Practical, Says AAA

In his decision, Wilkinson noted it simply isn’t practical for more than 100 cases to be pursued against Light & Wonder.

“As required by AAA Class Rule 4(a), the proposed class in this case is so numerous that joinder of separate arbitrations on behalf of all members is impracticable,” according to his opinion. “More particularly, there are roughly 112 members of the proposed class in this arbitration. This is far in excess of what is required since Second Circuit courts have held that numerosity is presumed for classes larger than 40 members.”

The arbitrator added that if more than 100 arbitration claims against a single company were allowed to proceed, such a move would violate the AAA’s tenants pertaining to cost-effective proceedings for all parties. He also pointed out that Light & Wonder’s claims regarding “individual issues” can be addressed in a class action.

In attempting to overturn a 2022 ruling by Wilkinson in New York State Supreme Court, attorneys for Light & Wonder argued the arbitrator ignored precedent and didn’t take into consideration that each prospective member of the class likely had different contentions. In his new opinion, Wilkinson noted differences among the class members are “narrow” and “provide no basis for decertifying the class.”

L&W Facing Other Card Machine Suit

The case arbitrated by the AAA isn’t the only card-shuffling machine litigation Light & Wonder is dealing with. The company is also contending with a similar suit in federal district court in Chicago where more than 1,000 casinos brought antitrust claims similar to those found in the case heard by the AAA.

Then known as Scientific Games, the company got into the card-shuffling device industry via its $5.1 billion acquisition of Bally Technology in 2014. In 2013, Bally Technology bought SHFL Entertainment, the maker of the original Shuffle Master machine.

SHFL Entertainment established a reputation for aggressively defending its patents and was once ordered to pay $315 million to Shuffle Tech, a rival that claimed SHFL forced it out of business after becoming part of Scientific Games.