Scientific Games and Shuffle Tech Reach $151mil Lawsuit Settlement

Scientific Games lawsuit

Scientific Games sued three automatic card shuffler design companies on patent infringements without legal standing, then lost a $315 million decision in the countersuit.

Scientific Games announced it has reached a $151.5 million settlement with Shuffle Tech and other plaintiffs in a longstanding lawsuit. Scientific Games is a giant in the global lottery ticket industry, but it also is a major player in the land-based and online casino industries.

Shuffle Tech and the other plaintiffs are less established gaming companies who claimed Scientific Games used its superior resources to try to stamp out its competition through underhanded tactics.

The $151.5 million figure represents 45% of the original $335 million the plaintiffs won in an Illinois lawsuit, which was decided in August 2018.

The lawsuit stemmed from sham litigation launched by Scientific Games. The lottery giant filed based on invalid patents in order to keep automatic card-shuffler competition out of the gaming market.

Shuffle Tech, Aces Up Gaming, and Poydras-Talrick Holdings filed a countersuit alleging they were damaged by Scientific Games’ spurious lawsuit.

Shuffle Tech Awarded $335 Million in Damages

In August, the plaintiffs won a $105 million judgment. In keeping with such lawsuits, an Illinois judge tripled the damages and assessed other fees, which amounted to a $335 million decision.

In such cases, Scientific Games would be expected to launch a series of appeals which could keep the case in the courts for years. Whether Scientific Games won the appeals or not, they could drag out compensating the plaintiffs for a long time.

A settlement which gives the plaintiffs and their lawyers 45% of the award without years of litigation (and the risk of a loss on appeal) is considered a better deal.

Scientific Games Statement on Lawsuit

Though the settlement ends the legal dispute, terms of the deal did not require Scientific Games to admit liability. That was made clear in a statement by the company after the settlement was announced.

James Sottile, EVP and Chief Legal Officer of Scientific Games, said in a press release, “While we firmly believe that the jury decision was wrong, we are pleased with the outcome of the settlement and that this matter will be resolved for good.”

Scientific Games, which is traded on the NASDAQ and is an S&P 400 company, owns several famous gaming groups: Bally Technologies, Barcrest, WMS Industries (Williams Interactive), and NYX Gaming are a few of them. Scientific Games also owns top lottery companies around the globe: 20% of Sportech (UK), 20% of Lotterie Nazionali (Italy), 20% of the Northstar Lottery Group (Illinois), and 50% of Guard Libang (China). One subsidiary, OpenBet, handles 80% of all sports betting in the United Kingdom.

Scientific Games’ social gaming footprint has grown significantly in the past coupel of years, as well.

Trial Court Must Approve the Settlement

The settlement between Scientific Games and its form legal adversaries is not complete at present. For the settlement to be official, the trial court has to issue an order vacating the judgment based on the jury’s verdict. Both sides anticipate the trial court will do so.

If that happens, then the settlement will end all litigation on the matter. It also will end all pending motions and other legal filings involving the case.