Scientific Games to Fight the Court’s Verdict

Publish: 03.09.2018

Following a lawsuit over a patent dispute, the court has ordered the American Gaming giant Scientific Games to pay a total of $315 million to four different companies.

According to the court’s ruling, the Nevada-based company has prevented a smaller firm from offering an automatic card-shuffling device, thus causing the firm to lose a substantial amount of money.

However, Scientific Games will probably file an appeal.

What Happened?

This “smaller firm” is Shuffle Tech International, which claims Scientific Games used “sham patent litigation against any competitor that dared to market competitive card shufflers“ in order to keep them out of the market. Along with Shuffle Tech International, three other companies were the plaintiffs in this case (Poydras-Talrick Holdings, Aces Up Gaming, and another company).

In the end, the jury awarded the plaintiffs $105 million, while the judge decided to triple this amount, which is now equal to the one-tenth of Scientific Games’ market capitalization.

Scientific Games ready to continue the legal battle

After the court’s ruling went public, Scientific Games addressed the U.S. Securities and Exchange Commission (SEC), stating the jury had made a wrong decision. In addition to this, the company also revealed its intention to file an appeal.

A boutique investment bank and advisory firm focused exclusively on the global gaming industry, Union Gaming, believes the appeal is the right response to the recent ruling and that it could improve the current situation.

Commenting on the current situation, Union Gaming analyst John DeCree predicted an appeal could reduce the size of the penalty and prolong the payment of the fine for a minimum of 18 months.

There’s even a chance the verdict will be thrown out.

Waiting for the Response

DeCree pointed out it was possible – though unlikely – the judge could throw out the jury’s decision and trim the damages awarded. However, he believes this won’t happen as it would set a precedent in the issues for appeal.

He also stated the company was redirecting its attention and focusing back to fundamentals and the business outlook.

The next step for the process will probably be the Seventh Circuit Court of Appeals, from which the appeal would take around a year and a half.

The verdict itself will hardly have any financial impact on Scientific Game, and by the time the appeal process ends, the company’s balance sheet should be looking much better.

The verdict marked an end to six years of legal activities, while the court proceedings lasted for three weeks.

The card shuffler that caused the whole dispute debuted at the 2012 Global Gaming Expo in Las Vegas and Shuffle Master, now known as SHFL Entertainment, filed a patent infringement suit shortly after.

A year later, the company was bought by Bally Technologies, which was acquired by SG in 2014 in a deal worth $5.1 billion.

SG has until September 5th to file an appeal.

About Scientific Games

Founded in 1973, the Las Vegas-headquartered company provides gambling products and services to lottery and gambling organizations worldwide. The company is headquartered in Las Vegas, Nevada. Products include electronic gaming machines, table games, online gaming and online lottery products, instant lottery games, lottery gaming systems, terminals and services, internet applications, server-based interactive gambling terminals, and gambling control systems.

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