Tech company Scientific Games is going to have to pay another tech company $315 million in an antitrust lawsuit for its card-shuffling technology. The company, which is one of the largest makers of games, game software, and gaming equipment, plans to appeal to the verdict.
Scientific Games
Headquartered in Las Vegas, Scientific Games provides games, gaming products, and services to lotteries and gambling organizations around the world. Its products include lottery systems and tickets. This is what the company produced when it started in 1974. It also makes lottery machines, electronic gaming machines, table games, interactive gaming terminals, electronic lottery games, and gaming control systems. The company is famous for the point-of-sale systems that two multistate lotteries in the United States use. These lotteries are Powerball and Mega Millions.
Scientific Games is a leader in the global lottery industry. Its global lottery revenue is $262 billion and its U.S. market revenue totals $56 billion. More than 40 states and territories offer lottery games in the United States. Scientific Games has recently begun operations in the gambling hardware and technology markets. And, this is where it ran into trouble. Another tech company is suing Scientific Games because it believes it is monopolizing the industry.
Shuffle Tech International
Shuffle Tech International is a Chicago-based company that has been producing card shuffle machines for casinos since 1983. It also designs table games for casinos. This puts the company in direct competition for some of Scientific Games’ market.
The Problem
When Scientific Games got into the gaming machines market, Shuffle Tech International made charges against it. This company said Scientific Games tried to stifle the competition by engaging in frivolous lawsuits. It said Scientific Games wanted to protect its monopoly and prevent other companies from taking business away from it. Shuffle Tech International sued Scientific Games in 2015 for what the company considered to be unfair business practices. Shuffle Tech said Scientific Games allowed this pattern of frivolous lawsuits to keep its monopoly over the gaming hardware industry. This is how it has kept its hold over the lottery hardware industry.
A federal jury in Illinois agreed with Shuffle Tech International. It said Scientific Games illegally tried to get rid of its competition and awarded Shuffle Tech a $315 million verdict. Shuffle Tech also charged Scientific Games tried to illegally obtain patents on parts of games that it had already patented.
Scientific Games and Shuffle Tech both make automatic card shufflers. Casinos use these devices as a security feature. They prevent players from counting cards, photographing cards or using other devices to gain an advantage in table games.
Shuffle Tech threw everything but the kitchen sink at Scientific Games with regard to the lawsuit. However, the court rejected many of the claims as unfounded, including the charges of filing frivolous lawsuits.
Because the jury agreed with Shuffle Tech International, it awarded the company more than $105 million in compensatory damages. In addition, because it agreed with the Shuffle Tech, the jury awarded the company double the amount in punitive damages. This brought the total amount awarded to Shuffle Tech International to $315 million. That is a large amount for a company to lose.
While Shuffle Tech said it is happy with its deal, Scientific American has said it will challenge the verdict. That will most likely mean the case will see for further litigation, most likely in a federal appeals court. Both Scientific Games and Shuffle Tech feel they have winnable cases. Only one of them will come out a winner in the next round, however.
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