Aristocrat Leisure Takes Legal Action Against Light & Wonder Over Dragon-Themed Poker Games

Aristocrat Leisure, the largest manufacturer of poker machines in Australia, is currently in the midst of a legal battle with its primary rival, Light & Wonder (L&W), because of allegations that L&W utilized private trade secrets to plagiarize one of Aristocrat’s widely-known games titled Dragon Link, as reported by the Australian Financial Review (AFR).

The lawsuit:

A prominent Australian Stock Exchange (ASX) listed gaming mogul has filed a lawsuit against Light & Wonder, claiming it has engaged in a campaign to plagiarize the aforementioned game and puzzle clients. In addition, it also claims that previous Aristocrat workers, now employed by Light & Wonder, embezzled trade secrets that breached laws in Nevada.

In a related development, Light & Wonder, operated by the previous executives of Aristocrat, will reportedly seek to depose for what it says is a “baseless lawsuit” over the design of its game titled Dragon Train, which was released last year and is on the way to become its fastest-selling game.

In this regard, the spokesperson for Light & Wonder commented: “These actions are entirely without merit, and we will be vigorously defending against them, including seeking the dismissal of this baseless lawsuit. Dragon Train is one in a portfolio of diverse new games from Light & Wonder that continue to bring competition and leading innovation to the industry which is being welcomed and embraced by our customers,” according to AFR.

The defense is reportedly projected to be submitted by the end of this week.

Allegations:

In legal documents reportedly submitted in Nevada, Aristocrat claims Light & Wonder received private information regarding the functionality and mathematics of Dragon Link, which it claims has nearly identical bonus features, pay tables, symbols and game rules.

On that note, the court documents state: “On information and belief, L&W has knowingly and for profit engaged in this infringing use of the Aristocrat trade dress to attract players, kn lodivip owing that players would wrongly believe that the games are associated or affiliated with, or sponsored or endorsed by, Aristocrat.”

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In addition to this, the aforementioned court documents also claim that the said game by Light & Wonder was manufactured by Emma Charles, a game creator who previously worked in Aristocrat and who actively worked on Dragon Link and quit in 2017. She and Lloyd Sefton, one more person who was a previous employee of Aristocrat and who resigned in 2016, provided L&W with all the necessary information to develop its latest game.

Speaking of which, the court documents claim: “L&W has acquired through improper means one or more of Aristocrat’s trade secrets embodied in the Dragon Link and Lightning Link games, including insofar as L&W knew or had reason to know that it had received the information from persons, including Ms Charles and/or Mr Sefton. On information and belief, at the time of the use, L&W knew or had reason to know that it had derived the information from persons, including Ms Charles and/or Mr Sefton.”

Connection between firms:

Aristocrat, whose founder is Len Ainsworth, is an international leader in the production of pokies and has a market value of $30 billion. However, its market share estimated at $13.6 billion, has been under pressure from L&W, which is operated by the previous CEO of Aristocrat Jamie Odell, as well as Matt Wilson, the previous chairman and managing director of Americas.

Relatedly, rest of the executives and directors of L&W who previously worked at the aforementioned firm involve Ted Hase, senior vice president of game design, and  Toni Korsanos, CEO of gaming Siobhan Lane. In addition, shares in L&W, which is also listed on the Nasdaq, have risen 67% since it officially joined ASX in 2023. In a note published by Macquarie on March 12, the 2 firms were described as “a duopoly within the industry’s oligopoly.”

Simply put, with this lawsuit, Aristocrat seeks prompt disclosure of Light & Wonder documents, for which it thinks will display the functionality, software, and origins of the Dragon Train game. Also, the firm claims that L&W’s behavior has already had an impact on market share and income.

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Speaking on the matter, the firm commented according to AFR: “Aristocrat has suffered – and, absent prompt injunctive relief, will continue to suffer – injury in the form of lost money and market share … lost goodwill and brand reputation … lost time and resources expended in trying to put a stop to L&W’s blatant plagiarism.”

In mid-morning trading on March 12, shares of L&W saw an increase by 0.3% to $152.30, and shares of Aristocrat saw a decrease of 0.6% to $45.62.