iGaming Daily

Andrew McCarron (00:00.014)
We're heading stateside in today's episode of iGaming Daily as two of the US's biggest iGaming suppliers have entered a legal battle over copycat game allegations. Evolution has filed a lawsuit against Light and Wonder with the Nevada District Court last week, where the former alleges Light and Wonder made use of IP related to its Lightning roulette title, accessing mass files to create a quote unquote copycat game.

That will be the topic in the first half of today's episode. Then in the second half, we'll stick with the US courts as we delve into a class action lawsuit filed against virtual gaming company VGW, where it questions the legality of social and sweepstake casino size in Georgia. And joining me, your host, James Ross, to get our heads around these lawsuits is Casino Beats and Slot Beats senior journalist, Danny Lee. Danny, are you up for it today?

Yeah, all this law talk has sort of made me want to bring out my inner Jack Nicholson from A Few Good Men. You know, you can't handle the truth. Didn't think you were going to go there. Do you know what? I kind of wish we had Jessica Wellman on now, because I think she would have really appreciated that quote. She would also be really good with this topic, but that quote alone, you would have got more of a response than from me, that mean. I don't even know if that was an accurate impression. yeah, the best. The best, trust me. The Yorkshire version.

Just don't let me get my The Shining Jack Nicholson impression out because that's a lot worse. Good luck getting through them glass doors. Perfect. Like before we do, let's, as always, mention the brave and beautiful OptiMove, the number one CRM marketing solution for the iGaming market. For listeners out there, you can still claim a free month of OptiMove if you sign up. You can do that by going to www .optimove .com forward slash.

I will leave a link in the description below. And just another reminder for everyone, the SPC Digital Innovation Payment Expert sponsored by PXP Financial, Gamble ID and Approvely is taking place next Wednesday, June the 12th. The first session is at 9 .30 UK time. There'll be six sessions on open banking, crypto regulation, compliance, digital ID and payments. Speakers from our sponsors and Kindred, Leo Vegas, Kwiff,

Andrew McCarron (02:26.798)
the payments association and more sessions will be available on demand. So register anyway, if you can't, if you can't make it again, I will leave the links in the description below. So first off evolution and light and wonder Danny, I vaguely explained what was going on. Can you just fill us in with actually what's happening? Yeah. So as you said, we're looking at an issue of intellectual property and an infringement.

on IP rights from Light and Wonder. Now we've seen a few cases of IP infringement sort of circling around the online casino industry in recent times and the land -based sector as well. And this actually isn't even the first case that Light and Wonder has been involved in this year. Just a couple of months ago it's been enthralled in a similar dispute with Aristocrat, but we'll get onto that later. So, Evolution has a series of Lightning table games and

Lightning Roulette might have been one of the first, I'm not too sure about that, but it's always been a consistent performer in the US. It was produced in 2018, I think, and I've played it and it is great. It's a good way to sort of add a bit of gamification into such a well -loved format like Roulette, and I think there's been a similar reaction from players as well. It's been a popular game. We see it climb the charts in our Eyeless Fantina reports that we cover every month.

And it's always towards the top, like I believe it was in the top five in the most recent one. So clearly, popular game. Now, if any listeners are sort of unaware of the title, then it's just your standard live casino roulette game, but with these sort of multipliers that get put on certain sections of the board, it can often be up to like times 100 or times 500 just to really enhance that roulette gameplay and make it more than just your standard times 36 win.

So it's a hugely popular variation of what is a hugely popular format. And now with Evolution having produced that game online, they then wanted to take it onto the LAN -based scale, which is where sort of light and wonder come into this situation. So back when they were scientific games, Evolution and scientific games were in negotiations to produce a LAN -based title for, or at least using the mechanics of.

Andrew McCarron (04:52.878)
Lightning Roulette. Now, it seems like those negotiations maybe fizzled out, but before they did sort of stop working together to try and produce this title, I think Evolution alleged that they shared confidential information with the defendant of this case, Light and Wonder, including the mathematics behind this popular game, Lightning Roulette. Now,

While those negotiations did fizzle out and they didn't make the title, Light and Wonder did then go on to release, I think towards the end of last year, a land -based cabinet called Power X, which is a roulette cabinet that is sort of similar multiplier mechanics being added to it to enhance that gameplay. And they also did produce Roulette X in April of this year. So just a couple of months ago there was an online version of this title.

So it was Ruler X is the, did you say the land base version? Ruler X is the online version, Power X is the cabinet. Okay, okay. So now this, due to the information that was allegedly shared by, between Evolution and Light and Wonder, back when they were working together, has led Evolution to file a lawsuit against Light and Wonder, alleging that these games are, quote, copycat titles. And they said that Light and Wonder gaming,

induced evolution into providing Light and Wonder with trade secrets. This is a lawsuit, this is what the lawsuit says. This is what the lawsuit is addressing, yeah, and it stated that Light and Wonder gaming induced evolution into providing them with trade secrets for Lightning Roulette. And then it says that under the auspices of entering into a partnership for developing a physical Lightning Roulette game tables, they then turned around and used those trade secrets to develop its own copycat products.

Now that's grow up from the lawsuit. So obviously as a result of that, Evolution is now filing this lawsuit with the district court in Nevada and hoping to gain compensation for damages and financial losses related to these alleged actions taken by Light and Wonder in addition to an injunction to prevent a similar situation from happening again. Just on this point now, so that's quite an in -depth overview and evaluation of it. It was really good. But...

Andrew McCarron (07:21.358)
What has been the response from Light and Wonder regarding this? As of this moment in time with the news just dropping a couple of days ago, we're yet to see sort of a response from Light and Wonder, but I'm pretty sure that will come eventually. And the only thing that makes me say that is because, as I mentioned earlier, Light and Wonder have been involved in quite a similar dispute just a couple of months ago. I think it was in March where it looks like...

Aristocrat, another huge supplier on the land -based scale in America, accused Light and Wonder of sort of using similar IP to its game, the Dragon Link series, saying that Light and Wonder's jewel of the Dragon game was a quote, cheap knockoff, copying its graphics, sounds, and trade dress. Yeah, this was filed in the same...

district court as the originally Nevada district court. Both in Nevada, yeah that's true. Now from those allegations Light and Wonder did respond with a fairly heavy response saying that this lawsuit is the latest instalment in its continued, in aristocrats continued international campaign to undermine the release of Light and Wonder's innovative competing products. So clearly taking a very defensive stance to that lawsuit.

They also said, rather than competing on an even playing field in the market, aristocrat has contrived basis legal claims in multiple jurisdictions coinciding with the release of Light and Wonders products in an effort to tarnish the company's product rollouts and drive customers away. So as you can see that's quite a defensive reaction to the lawsuit. They're sort of, you know, holding the ground in a way. And there is some sort of similarities between

these two cases and the fact that it is IP that's involved and it's obviously lying wonder on the defensive side of things. Now what you have differently between the two cases is with the recent evolution case, obviously evolution have claimed that they had shared specific documents behind the mathematics of the game, meaning that there's... Inside of secrets. Inside of secrets, exactly. There's confidential information that's allegedly been involved there. Yeah.

Andrew McCarron (09:45.838)
Now with the aristocrat situation, it was actually an employee that was sort of in that similar situation where aristocrat have alleged that a former employee of theirs who worked on the maths models of Dragonlink then went on to work for Light and Wonder and they claim that they must have used their knowledge to provide Light and Wonder with a title that has similar gameplay for Dragonlink. So it's two very similar situations in the space of what, two months at Light and Wonder.

have been accused of. But again, these are all alleged claims and like I wonder have stated their defence against the aristocrat and I do just think that the response to evolution is surely not far away at this moment in time. But who knows they might rather take a different approach and just deal with it all on a legal field. We'll find out hopefully in the next week or so. Okay. I was going to ask you about the next steps, but I believe you just answered them. So we'll round off the first half of this podcast.

take a quick break and then in the second half we will stay stay stay aside and we'll be talking about the Georgia lawsuit. Welcome back to iGaming Daily and as promised in the first half we're sticking on lawsuits but instead of Danny Lee I have roped in SBC America's editor Jessica Wellman to go over all things Georgia regarding their class accident lawsuit or class accident lawsuit in Georgia may I say?

Jess, you okay? Yeah. I've been knee deep in so many legal documents. I was telling my team, I'm like, thinking about how much lawyers can bill per hour. I have really picked the wrong career this week in particular. I'm like, I should be making thousands, dang it. Yeah. And I actually need to apologize for you now, because every time I come on a podcast with you, it becomes an educational session.

This is okay. Like, you know, my shtick with star Charlie is like, Hey, have you heard of this American thing? So we all have our things. Yeah. And that shtick is going to continue with this British guy who the US law knowledge is minuscule. In fact, anything kind of US based at the moment is kind of minuscule, which is actually why I love our conversations because I walk away a little brighter than I was before. but one of these things that we are going to talk about today is actually sweepstakes and it's.

Andrew McCarron (12:13.134)
relation to the Georgia class action lawsuit filed by a woman in Georgia against VGW, I believe it was. If you're not familiar, VGW runs basically the biggest sweepstakes sites in the country, Luckyland, Jumba, and Global Poker. Perfect. And for maybe the Europeans out there who might not know the US terminology for sweepstakes, mainly for me, can you just expand on what sweepstakes actually are? Sure. So.

The definition I'm going to give you may not necessarily be the way that VGW describes what they do. You'll find that these companies will say they are social casinos. I think when you hear the word social, at least in the United States, we think of Candy Crush, Slotamania, things where you may be spending money to get tokens to play, but the end of the day, you're just playing for fun and there's no real prize at the end of the day.

of the tunnel. For sweepstakes, quick history lesson. We're all ready. I'm doing my shtick, you're doing your shtick. So like, I'm assuming you have these as well. You know, you have serial companies or hotels who are like, stay at our hotel and you can enter a contest to win a five day vacation or enter a contest to win a thousand dollars. These kinds of promotions. Yeah, we've got stuff like that.

So the laws around those promotions in the United States tend to be called sweepstakes laws, which means like that these groups can run these contests that are games of chance and not really have them fall into the category of gambling. People much smarter than me who are actual lawyers who would have been making thousands of dollars doing what I did this week can more accurately describe a lot of it, but essentially sweepstakes sites in the United States,

The biggest indicator to sweepstakes site is there is some sort of dual currency system. There's coins, some sort of coin that you get for logging in every day, or maybe if you email the company, they're going to give you a certain amount of coins, or you can do tasks to obtain them. You can also purchase them. And then there's a secondary type of currency that can be earned through those free coins.

Andrew McCarron (14:33.742)
And that secondary currency, the big thing is that it has real money value. So the first currency is worthless. It's within, except within the context of the game. The second currency has some sort of value outside of the world that can be redeemed for dollars. And what these sweepstakes sites do essentially is they basically allow you to bulk buy this secondary currency. And for many, the argument is,

This is just a really complicated way to fund a casino. If the wheels are turned, I wish we had video. James is just like, it's that, what is it from the hangover where he's seeing all of like the math equations. Yeah. I think I was speaking to Danny. I'd also mentioned it to you kind of my, my own example of what I thought this sounded like. And it was, and forgive me for my awful team.

It's not a cartoon, no, but it might as well be close. It's a sitcom. My poor taste in TV. There was an episode of Young Sheldon where his grandmother runs a laundrette, but at the back she runs an illegal casino ring. And when the people who are spending money in the slot cabinets, they pay with real money. And when they go and reimburse their ticket when they've won, they... the...

person who owns the casino ring hands a teddy bear to the customer and then they buy the teddy bear off the customer for the amount of money that they had won. It's similar. Is that similar? It's almost in reverse, you know, where you're like, I'm going to buy this teddy bear and then now redeem it. But yeah, that's essentially, you know, they brought it up in the lawsuit. I will admit I did this back in the day.

Internet cafes in Georgia and online poker sites, which is where I did this, used to do, you could go to the gas station and buy phone cards that are supposed to be redeemable for like minutes on your phone, right? Or to make like long distance calls. That's how old I am. But if you went on Bodog or some of these sites and put in the phone card, it would turn into money on the site. So it's a roundabout funding mechanism, essentially.

Andrew McCarron (16:52.462)
So that's the critics of this are saying this is essentially an online casino, with just complicated funding, not really at the root of what like sweepstakes law is intended to cover. Okay. And in Georgia, this woman has filed a lawsuit, Destiny Kennedy. Yes. why has she filed this lawsuit? She is filing a lawsuit basically suggesting that this is not a social casino and that she is, that they are running what

by the definition of Georgia law is a gambling operation. As I mentioned, they cited this internet cafe law that they passed in 2012. I don't know how applicable it's going to be because it was really very specific in that law that it couldn't take place at a place of business versus like someone's phone on their home computer, that sort of thing. So I'm not sure how much that legal argument holds. Again, just big.

as always on these big I am not a lawyer caveat around all of this. But you know, questioning the legality of this and in Georgia, as in many other states, there are laws on the books that essentially say that you can sue to recoup your losses on these, with illegal gambling and they have to pay back what you've lost. Like Kentucky had a very high profile case with PokerStars a few years ago.

where they had to pay losses to Kentucky people for offering an illegal gambling site. Okay. Yeah. For full transparency here, Jess, I am crawling through your article. Again, I'm no expert in this, so I am absolutely utilizing your whole knowledge here. You mentioned there's been quite a few similar cases or similar lawsuits against sweepstake operators. Correct.

What are these other cases and why are we kind of seeing these lawsuits come against them? I mean, we've always seen lawsuits against gambling sites. As I mentioned, this Kentucky one dates back like 10 years. Sweeps, there are a lot of new operators out there. So I think there's a lot of people just kind of seeing that the legal, like I will say compared to say like these like DFS pick and products that we've talked so much.

Andrew McCarron (19:15.342)
about on the US is why I gave me daily. Honestly, I think these sweeps sites have a stronger legal argument. The sweeps law is more clearly delineated in most states. But you know, I think people are seeing, you know, Americans like to sue people. Frivolous lawsuits happen all the time.

As a bird, I didn't want to say that. No, we're a very litigious group. So that's every time there's a class action, I have to go and like Google the person's name and make sure they haven't filed 30 other class actions. And that's not just like how they make their money, you know. So I think some of it is just this is a new vertical and people see the opportunity. And I think others are trying to potentially force the hand of somebody to rule on whether this is legal or not. And I think.

I know where you're going next, which is why is this one so interesting? Bingo. I am not readable. Well, I mean, it's the natural question. If there are so many, why are we talking about this one in particular? The reason we're talking about this one in particular is because with most gaming sites, both sweeps and, you know, regulated, like anything, you check that terms and conditions box when you create your account.

Many, many. This isn't just gaming. I was telling Joe Streeter this and he was floored. I was like, just about everything in the United States has this. When you click those T's and C's, you're essentially agreeing in many instances to if there is some sort of dispute legally about your activity with this company, that you're going to go to arbitration. And arbitration for those who aren't familiar, that is a private situation where an a

unbiased arbiter hears both sides and reaches a conclusion and it's not allowed to go to the courts. And so the Fliff lawsuit got tossed for arbitration. There was a Bet MGM lawsuit that got tossed for arbitration. And in fact, a year ago, there was a lawsuit from a John Doe in Georgia who his got tossed because he had agreed to go to arbitration. What Destiny Kennedy has done is emailed

Andrew McCarron (21:28.654)
VGW and very clearly opted out of arbitration at every single point where she needed to. So that it's kind of forcing the hand of, okay, we're not going to let you pull the arbitration argument that has been successfully pulled in many other cases. Okay. I'm trying to think if we have something similar to arbitration in the UK. I think I've thought about maybe an ombudsman, which is...

If we have a dispute with say the electric company or a gas company and we were owed money and we'll go to the ombudsman for help. But I think I don't think that might be the case. Sorry. I am waffling a bit. No, I mean, I get that. Like, again, I was talking to Joe Streeter about it because they've been covering it at Casino Beats 2 and he was like, what is this? I'm like, yeah, you know, you just you agree that you're going to settle it out of court privately. I.

Before we recorded this podcast, I got a package from like a used clothing company. I'm sure that somewhere in those terms and conditions, I've agreed that like, you know, if this dress I ordered is covered in poison, that I'm not allowed to sue them and I have to take it to arbitration. Like it's very, very common, these arbitration clauses. I think I need to start reading my terms and conditions in case the UK's are sneakily getting me in there.

I know, like, I mean, we're just signing our life away left and right. It's true. The amount of times I just accept. So that's what's really interesting here is that, you know, I before I even opened the case, Sue Schneider flagged it in Slack and I was like, going to arbitration. And then I opened it and I was like, not going to arbitration. Interesting. OK, so not going to arbitration. Kennedy filed this on May the 17th. Yep.

Has there been a response from VGW and what can we expect moving forward with the case then? Not yet. That's normal. In most court cases, you're given like a fairly reasonable sum of time to file a response brief because these briefs are long. You know, like I think the again, I've read like 30 things this week. I mean, I'm going to guess this one is is 40 pages long, the initial complaint. So lawyers need time to go through those 40 pages and kind of.

Andrew McCarron (23:42.606)
you know, argument by argument file their response. In the meantime, you know, there's other things too you're filing, which lawyers can, you know, participate in various paperwork and that sort of thing. So it's, it's going to take a minute. These always do. We will continue to track on SBC Americas as there is an update, but I think it'll be very interesting to see what the argument is going to be if she's opted out of, if she's...

Again, I don't know if what they have in these documents is 100 % ironclad that she has opted out. I don't know if BGW is going to come back and say that she did something wrong or like, you know, she misclicked something, but it'll be interesting to read that response and see the focus more on letter of the law versus arbitration. And like Jess said, listeners.

She will be covering this as and when it breaks. So stage, well, keep your eyes on peeled for on SPC Americas where she'll be covering it from toe to toe as she does deep diving into those law, those law papers. Until I get that legal decree and get the heck out of Dodge. Well, apart from that, Jess, thank you for joining us and making it clearer to me what this sweepstakes situation is all about. And listeners out there, thank you for tuning in and we will see you next week on Monday.

for the next episode of iGaming Daily. You'll see how she'll hear from us, but until then, bye.