It was a bittersweet victory for the “little guy” last week as a trio of gaming equipment developers and distributors won a lawsuit against gaming giant Scientific Games. A Chicago jury awarded the group $105 million, but because it was an antitrust case, federal regulations trebled the damages to $315 million.
Shuffle Tech Takes On Shuffle Master, Shuffle Master Throws Weight Around
I’ll be honest, I had a little trouble understanding all the details of the case, but I’ll do my best to give you the gist. In the early part of this decade, Shuffle Tech, which had previously only made automatic card shufflers for the consumer market, decided to develop one for the casino market, a market dominated by Shuffle Master. For the sake of the timeline, Shuffle Master was acquired by Bally Technologies in 2012, which was in turn bought by Scientific Games in 2013.
Shuffle Tech finished the automatic shuffler in 2012 and entered into a licensing deal with DigiDeals. DigiDeals also sub-licensed the product to Poydras-Talrick Holdings. Just ten days after the product, DigiShuffle, was unveiled to the industry, Shuffle Master sued for copyright infringement.
In 2014, DigiDeal took a look at Shuffle Master’s patents and, in a nutshell, determined that key artwork had been hidden and it was this artwork that Shuffle Master based much of its patent infringement suit upon. It also found that Shuffle Master had a history of filing similar lawsuits against smaller competitors in what looked like an attempt to just kill companies through litigation.
Underdogs Fight Back
Shuffle Tech, Poydras-Talrick Holdings, and Aces Up Gaming, a company that worked with DigiDeal, then filed an antitrust suit against Shuffle Master.
Shuffle Master filed a motion to have the suit dismissed and in October 2015, a judge dismissed five of the counts, but let one stay, an antitrust count.
“Plaintiffs have sufficiently shown that they ‘intended to enter’ the casino shuffler market ‘and [were] prepared to do so within a reasonable time,’” the judge wrote. “Because they have sufficiently pleaded facts alleging antitrust injury and supporting antitrust standing, plaintiffs may bring a section 2 claim for damages and injunctive relief pursuant to sections 4 and 16 of the Clayton Act, respectively. The Court declines to dismiss Count 2.”
Jury Burns Shuffle Master, Scientific Games
Thus, the case advanced and last week, a jury ruled for the Shuffle Tech group and against Shufflemaster/Scientific Games. The bittersweet part I mentioned at the top of the article was that while this was a great outcome for Shuffle Tech, Aces Up, and Poydras-Talrick (pending appeal), it is too late for Shuffle Tech. Shuffle Tech’s CEO, Rick Schultz, told Howard Stutz of CDC Gaming Reports that the cost of the lawsuits was simply too much and it old the DigiShuffle technology to another company so that it can focus solely on the consumer market. DigiDeal also stopped making the product.
For its part, Scientific Games said through a spokesperson, “The company believes the jury reached the wrong result and will seek review of both the finding of liability and the damages award both before the trial court and if necessary on appeal.”
