CHICAGO — A federal judge has denied a request made by Scientific Games Corporation and its subsidiary Bally Technologies Inc. and Bally Gaming Inc. to fold up the sole remaining count in a competitor's antitrust lawsuit over casino card shuffling technology.
U.S. District Judge Matthew F. Kennelly handed down the opinion on Sept. 1, holding the plaintiffs provided sufficient evidence that Las Vegas-based Scientific Games may have acted fraudulently.
Scientific Games is accused by rival Shuffle Tech International LLC and its subsidiaries, Aces Up Gaming Inc. and Poydras-Talrick LLC, of misusing patents for an automatic card shuffling device to stifle competition. A phone arbitration session was set for Sept. 19.
The dispute arose over two patents held by Shuffle Tech acquired for a device named “Deckmate 1,” a card shuffler that is positioned under a gaming table and retrieves cards, returning them to a dealer.
Scientific Games and its allied companies manufacture and distribute gaming devices to casinos and lottery organizations worldwide. In 2012, Shuffle Tech developed an automatic single-deck card shuffling device to be used by casinos and entered into a licensing and patent agreement with gambling equipment manufacturer, DigiDeal Corp.
Under the agreement, DigiDeal would engineer, produce and market the card shuffler in exchange for royalty payments to Poydras and Shuffle Tech. Shuffle Tech agreed to defend DigiDeal against any patent infringement claims involving the technology.
Prior to this, Scientific Games allegedly had enjoyed near total domination of the casino market for card shuffling machines.
In 2012, DigiDeal exhibitors demonstrated their new prototype card shuffler at a gambling expo in Las Vegas. Scientific Games personnel who attended the event later filed suit against DigiDeal. Shuffle Tech officials claimed this was an attempt by Scientific Games to deliberately misuse patents it knew were invalid.
In April 2015, Shuffle Tech filed suit against Scientific Games, alleging the company had pursued false litigation to monopolize the card shuffler market in violation of two federal antitrust laws, the Sherman and Clayton acts, and what amounted to deceptive trade practices.
A court had previously dismissed several counts in favor of Scientific Games, including allegations of unfair competition in violation of antitrust laws, but allowed Shuffle Tech to continue with its count alleging Scientific had used patents and sham litigation to eliminate competition.
"[The] plaintiffs have provided sufficient evidence to support a finding that [Scientific Games] acted with fraudulent intent in omitting the references," Kennelly said in the opinion.
Shuffle Tech is represented in the action by attorneys with the firms of Nixon & Vanderhye P.C., of Arlington, Va.; Freeborn & Peters LLP, of Chicago; and Miller, Canfield, Paddock and Stone, P.L.C., of Chicago.
Scientific Games is reprensented by the firm of Jenner & Block LLP, of Chicago.