Aristocrat and Light & Wonder settle their Dragon Train dispute. This means that one of the biggest storylines about intellectual property in the casino sphere of the past few years has come to an end. This was a story about the importance of IP for casino owners and marketing teams, as well as the operational risks that arise when the math of a popular game is questioned.

We’ve witnessed a $127.5 million settlement between two of the industry’s biggest players. After a longstanding legal battle, Aristocrat Leisure and Light & Wonder have agreed to settle their pending litigation in Australia and the US regarding the Dragon Train and Jewel of the Dragon titles. In this article, we’ll analyze the impact on supplier trust and the value of proprietary game math.

How Companies Protect the “Hold and Spin” Systems

The Dragon Train and Jewel of the Dragon games from Light & Wonder were the main points of contention. Aristocrat argued that these games weren’t just similar to their own but were built using stolen math information, trade secrets, and copyrighted operations. This matter arose when a former Light & Wonder employee inappropriately used mathematical algorithms, directly violating policies.

And this is a big deal. Since a specific “hold and spin” mechanic determines a machine’s success, the underlying code is a multi-million dollar asset. Hence, it needs to be protected. The logical solution is to file lawsuits: the first in 2024 and the second in 2025.

Then came a joint statement regarding resolution of litigation, which included an agreed settlement of Light & Wonder compensating Aristocrat in respect of misappropriation and infringement claims of intellectual property.

By settling, Light & Wonder has agreed to:

The Main Points of the Settlement

The specific terms of the resolution will remain undisclosed. However, it has been confirmed that Light & Wonder acknowledges that certain mathematical data from Aristocrat was really used in the development of its games.

Besides making every effort to remove any current installations, the supplier has to permanently stop the commercialization of these games. Light & Wonder has also agreed not to use the mathematical data and copyrighted works and to destroy all documents containing this information.

Aristocrat’s and Light & Wonder’s Confidential Procedures

In the ongoing legal dispute, the companies have also agreed to resolve any issues related to the use of Aristocrat’s mathematical algorithms and models in certain existing Light & Wonder games and games currently in development.

Matt Wilson, CEO of Light & Wonder, is pleased to have resolved this matter and move forward, conducting business in an ethical manner and respecting the intellectual property rights of competitors. He said that this resolution safeguards the interests of clients, staff, and shareholders, enabling the company to concentrate on creating the exceptional content.

Why This Conflict Matters for Casinos

The casino operator is frequently left with the headache when a supplier is subject to an injunction.

  1. If a court orders a game to be turned off, operators lose the daily revenue from likely high-performing machines.
  2. B2B supplier trust can be lost. Casino owners need to know that the titles they lease or buy won’t be subject to a legal blackout.

Currently, Hold and Spin features are popular, as they are almost the biggest revenue drivers. This case proves that the specific math that keeps a player in their seat is legally protected territory. This is undoubtedly the point to focus on.

Math-Based Loyalty as a Market Trend

Players might not know the name of a developer, but they feel a game’s volatility, so they develop what is called math-based loyalty. Operators see that players follow specific mechanics from one machine to the next. So, they order or add similar games from the top providers.

Unfortunately, some suppliers try to take a shortcut by borrowing a proven math model and skip the years of trial and error required to build a hit. This is not a good way to go. As we saw by the Aristocrat’s aggressive defense of its IP, the industry’s top tier will no longer allow copy-and-paste game development. This settlement forces a higher standard of original innovation.

Three Takeaways

1. When pitching a new partnership or game title, learn the product’s fundamentals first. Partnerships are safer when they are built on original, clean-room-developed technology.

2. Operators should diversify with multiple suppliers and ensure their contracts have protections against forced removals due to IP litigation. This way, you minimize your revenue loss.

3. True market leadership comes from creating the next big mechanic. The $127.5 million price tag demonstrates how much more expensive imitation is than innovation.

The settlement between Aristocrat and Light & Wonder brings stability and shows that game math is a proprietary asset that must be respected. Casino owners must ensure that the games they offer are legally sound and built to last. If you need help with partner research and promotion in iGaming, contact us!