Light & Wonder Provides Update on Dragon Train Litigation
Light & Wonder (NASDAQ: LNW) provided an update on its ongoing litigation with Aristocrat regarding Dragon Train and related games. Aristocrat filed a second amended complaint adding trade secret misappropriation claims against Jewel of the Dragon. Key developments include:
- LNW will voluntarily stop commercializing Jewel of the Dragon and offer replacements to customers
- Company discovered certain Aristocrat PAR sheets from 2015 were available to development team
- Expanding review to include all hold and spin games released before mid-2021
- Approximately 95% of 2,200 Dragon Train units have been converted in North America
Despite these challenges, LNW reaffirms its 2025 financial targets of $1.4 Billion Targeted Consolidated AEBITDA and Targeted Adjusted NPATA between $565-635 million. The company states Jewel of the Dragon's removal is not expected to materially affect revenue or future growth.
Light & Wonder (NASDAQ: LNW) ha fornito un aggiornamento sulla sua controversia in corso con Aristocrat riguardo a Dragon Train e ai giochi correlati. Aristocrat ha presentato una seconda denuncia modificata aggiungendo rivendicazioni di appropriazione indebita di segreti commerciali contro Jewel of the Dragon. Sviluppi chiave includono:
- LNW interromperà volontariamente la commercializzazione di Jewel of the Dragon e offrirà sostituzioni ai clienti
- L'azienda ha scoperto che alcuni fogli PAR di Aristocrat del 2015 erano disponibili per il team di sviluppo
- Espansione della revisione per includere tutti i giochi di hold and spin rilasciati prima della metà del 2021
- Circa il 95% delle 2.200 unità di Dragon Train sono state convertite in Nord America
Nonostante queste sfide, LNW ribadisce i suoi obiettivi finanziari per il 2025 di 1,4 miliardi di dollari di AEBITDA consolidato mirato e NPATA rettificato mirato tra 565 e 635 milioni di dollari. L'azienda afferma che la rimozione di Jewel of the Dragon non dovrebbe influenzare materialmente il fatturato o la crescita futura.
Light & Wonder (NASDAQ: LNW) proporcionó una actualización sobre su litigio en curso con Aristocrat relacionado con Dragon Train y juegos relacionados. Aristocrat presentó una segunda demanda enmendada agregando reclamaciones de apropiación indebida de secretos comerciales contra Jewel of the Dragon. Los desarrollos clave incluyen:
- LNW dejará de comercializar voluntariamente Jewel of the Dragon y ofrecerá reemplazos a los clientes
- La empresa descubrió que ciertos documentos PAR de Aristocrat de 2015 estaban disponibles para el equipo de desarrollo
- Ampliando la revisión para incluir todos los juegos de hold and spin lanzados antes de mediados de 2021
- Aproximadamente el 95% de las 2,200 unidades de Dragon Train han sido convertidas en América del Norte
A pesar de estos desafíos, LNW reafirma sus objetivos financieros para 2025 de 1.4 mil millones de dólares en AEBITDA consolidado proyectado y NPATA ajustado proyectado entre 565 y 635 millones de dólares. La empresa afirma que la eliminación de Jewel of the Dragon no se espera que afecte materialmente los ingresos o el crecimiento futuro.
라이트 앤 원더 (NASDAQ: LNW)는 드래곤 트레인 및 관련 게임과 관련하여 아리스토크랫과의 ongoing 소송에 대한 업데이트를 제공했습니다. 아리스토크랫은 드래곤의 보석에 대한 상업 비밀 유용 주장 추가를 포함하는 두 번째 수정된 고소장을 제출했습니다. 주요 개발 사항은 다음과 같습니다:
- LNW는 자발적으로 드래곤의 보석 상업화를 중단하고 고객에게 대체품을 제공할 것입니다
- 회사는 2015년 아리스토크랫 PAR 시트 중 일부가 개발 팀에 제공되었다는 것을 발견했습니다
- 2021년 중반 이전에 출시된 모든 홀드 앤 스핀 게임을 포함하도록 검토를 확대하고 있습니다
- 북미에서 2,200개의 드래곤 트레인 유닛 중 약 95%가 변환되었습니다
이러한 도전에도 불구하고 LNW는 2025년 재무 목표를 재확인합니다 14억 달러의 목표 통합 AEBITDA와 5억 6500만에서 6억 3500만 달러 사이의 목표 조정 NPATA를 설정했습니다. 회사는 드래곤의 보석 제거가 수익이나 미래 성장에 실질적으로 영향을 미치지 않을 것으로 예상한다고 밝혔습니다.
Light & Wonder (NASDAQ: LNW) a fourni une mise à jour sur son litige en cours avec Aristocrat concernant Dragon Train et les jeux associés. Aristocrat a déposé une seconde plainte modifiée ajoutant des allégations de détournement de secrets commerciaux contre Jewel of the Dragon. Les développements clés incluent:
- LNW cessera volontairement de commercialiser Jewel of the Dragon et proposera des remplacements aux clients
- L'entreprise a découvert que certaines feuilles PAR d'Aristocrat de 2015 étaient disponibles pour l'équipe de développement
- Élargissement de l'examen pour inclure tous les jeux de hold and spin sortis avant la mi-2021
- Environ 95 % des 2 200 unités de Dragon Train ont été converties en Amérique du Nord
Malgré ces défis, LNW réaffirme ses objectifs financiers pour 2025 de 1,4 milliard de dollars de l'AEBITDA consolidé ciblé et un NPATA ajusté ciblé entre 565 et 635 millions de dollars. L'entreprise déclare que le retrait de Jewel of the Dragon ne devrait pas avoir d'impact significatif sur les revenus ou la croissance future.
Light & Wonder (NASDAQ: LNW) hat ein Update zu seinen laufenden Rechtsstreitigkeiten mit Aristocrat bezüglich Dragon Train und verwandten Spielen bereitgestellt. Aristocrat hat eine zweite geänderte Klage eingereicht, die Ansprüche wegen Veruntreuung von Geschäftsgeheimnissen gegen Jewel of the Dragon hinzufügt. Wichtige Entwicklungen sind:
- LNW wird freiwillig die Kommerzialisierung von Jewel of the Dragon einstellen und den Kunden Ersatz anbieten
- Das Unternehmen hat festgestellt, dass bestimmte Aristocrat PAR-Datenblätter aus dem Jahr 2015 dem Entwicklungsteam zur Verfügung standen
- Erweiterte Überprüfung, um alle Hold-and-Spin-Spiele einzubeziehen, die vor Mitte 2021 veröffentlicht wurden
- Etwa 95 % der 2.200 Dragon Train-Einheiten wurden in Nordamerika umgerüstet
Trotz dieser Herausforderungen bestätigt LNW seine finanziellen Ziele für 2025 von 1,4 Milliarden Dollar angestrebtem konsolidierten AEBITDA und angestrebtem bereinigtem NPATA zwischen 565 und 635 Millionen Dollar. Das Unternehmen erklärt, dass die Entfernung von Jewel of the Dragon voraussichtlich keinen wesentlichen Einfluss auf die Einnahmen oder das zukünftige Wachstum haben wird.
- Reaffirmed 2025 financial targets despite litigation challenges
- Jewel of the Dragon removal represents less than 1% of Premium installed base
- Successfully converted 95% of Dragon Train units within compliance period
- No evidence of similar issues found in games released from mid-2021 to present
- New trade secret misappropriation claims filed by Aristocrat
- Discovery of unauthorized access to Aristocrat's 2015 PAR sheets
- Forced to stop commercialization of Jewel of the Dragon
- Termination of game designer Emma Charles for breaching employment obligations
Insights
Light & Wonder's litigation update reveals expanding legal challenges that warrant investor attention. The company is now voluntarily withdrawing Jewel of the Dragon from the market after Aristocrat added trade secret misappropriation claims against this second game. This follows the earlier court-ordered removal of Dragon Train units, signaling escalating IP complications.
While management reaffirms their
From a financial perspective, management's claim that Jewel of the Dragon's removal won't materially impact revenue appears reasonable given its footprint (
The swift action to replace
Given the ongoing litigation and expanding scope of review, investors should monitor Q1 2025 results for any changes to financial projections or additional game removals resulting from the expanded internal audit.
This escalating IP dispute presents significant legal risks for Light & Wonder despite their confident posture. The addition of a trade secret misappropriation claim against Jewel of the Dragon represents a material expansion of Aristocrat's case beyond the original Dragon Train litigation.
Particularly concerning is the discovery that Aristocrat's PAR sheets from 2015 were accessible to LNW's development team. While the company correctly notes that PAR sheets have historically been widely distributed in the industry, their possession of competitor technical documentation creates problematic evidence in a trade secret case. The voluntary withdrawal of Jewel of the Dragon suggests LNW recognizes serious vulnerability on this claim.
The company's expanded review of all hold and spin games released before mid-2021 indicates concern about potential systemic issues. However, LNW's assertion that they "have no reason to believe" this review will identify similar problems appears optimistic given the developments to date.
LNW's strategy of pre-emptively sharing math models with Aristocrat for new games like Dragon Train Grand Central demonstrates appropriate remedial action. However, Aristocrat's latest claim that replacement games would "reap the benefits" of trade secret misappropriation even without using claimed trade secrets introduces a novel legal theory that could complicate LNW's product development pipeline.
The termination of the game designer for breaching employment obligations represents an implicit acknowledgment of wrongdoing that could strengthen Aristocrat's case. Investors should recognize that while Aristocrat's success in securing a preliminary injunction suggests merit to their claims, the final outcome remains uncertain pending full litigation.
Reaffirms 2025
Company to Host Conference Call at 4:30 PM Eastern Time
On March 14, 2025, Aristocrat filed a second amended complaint with the District Court of
In the latest complaint, Aristocrat has also raised new issues, which we intend to vigorously defend against.
First, Aristocrat asserts that replacement games for Dragon Train, including Dragon Train Grand Central, a social game we have released, would “reap the benefits” of trade secret misappropriation even if none of the claimed trade secrets are used in such games.
- There are many elements of Dragon Train that made it successful and that are not contested by Aristocrat. We have structured development of new games to solve the issue raised by Emma Charles’ use of certain math in the design of Dragon Train.
- We have been and will continue to be transparent with the courts and Aristocrat on the process to ensure that new games do not contain any of Aristocrat’s claimed trade secrets or confidential information. We followed that process with our new social game, Dragon Train Grand Central. We provided the math to Aristocrat in advance of the launch of the game.
- Aristocrat has made no claim with respect to the Dragon Train Grand Central math, and we are confident the same will be true for our Dragon Train replacement land-based game that is in development.
Second, Aristocrat’s complaint also refers to emails sent by Emma Charles, the game designer of Dragon Train, to other team members at L&W that were provided to Aristocrat as part of the discovery process.
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Represents a non-GAAP financial measure. Additional information on non-GAAP financial measures presented herein is available at the end of this release. |
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(2) |
Targets reaffirmation does not include any contribution from the proposed acquisition of Grover Charitable Gaming business. |
- We have investigated the circumstances surrounding these e-mails and have not identified any evidence of similar issues affecting games of other studios related to these e-mails.
Third, Aristocrat references an unreleased game in its latest amended complaint.
- The game in question was part of our pipeline of products. Our internal review processes identified that an early version of this game’s math model potentially presented issues relating to Aristocrat. While these issues had been removed in later versions, we took a conservative position and acted promptly prior to this amended complaint to stop further development of the game and will not be releasing it.
Finally, Aristocrat has for the first time made a trade secret misappropriation claim on Jewel of the Dragon.
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In light of this claim, we made the decision to voluntarily stop commercializing and offer to replace Jewel of the Dragon to minimize any confusion and potential disruption to our customers. We are seeking to ensure our customers are not affected by the ongoing legal process. The success we had in rapidly replacing the Dragon Train units, and the strong game performance of our broader portfolio, give us confidence that this is the best course of action for our customers at this point as we continue to build great games. For context, Jewel of the Dragon’s Premium installed base footprint is less than one percent (
1% ) of the total Premium installed base inNorth America , with approximately 150 premium leased units. - After Aristocrat added the trade secret claim on Jewel of the Dragon, we identified certain Aristocrat PAR sheets dated 2015 that appear to have been available to certain members of the Jewel of the Dragon development team. PAR sheets are used by suppliers to describe the performance characteristics and settings of a slot machine and contain information about the game’s payout structure and odds and some of the mechanics of how the machine operates. These PAR sheets have been historically provided to customers to allow them to meet regulatory requirements and to understand their own exposure as it relates to the likelihood of large but infrequent award amounts. Because PAR sheets have been so widely distributed, it has historically been common for PAR sheets from industry players, including L&W, to end up in the hands of competitors.
- Given our identification of these historical Aristocrat PAR sheets, we are expanding the scope of the review we conducted following the preliminary injunction to include all hold and spin games released before mid-2021. We have no reason to believe that the expanded review covering all hold and spin games released before mid-2021 will identify evidence of similar issues. The scope of our initial review included a number of later versions of games first released before mid-2021. None of those later versions had evidence of similar issues making it unlikely that earlier versions would. Furthermore, all of these games have been on the market for a minimum of three years. Separately, no one has made a claim that any of these games incorporate confidential trade secrets of any other party. We plan to give an update to the market on this review as part of our Q1 2025 results briefing.
We remain steadfast in our commitment to continued R&D investment to further develop our catalog of proven, evergreen franchises. The broad uplift in game performance we’ve experienced across our portfolio is a testament to the quality of the talent and culture in our organization. We are extremely proud to have a robust and diversified portfolio of the best products in the market that gives us a competitive advantage not tied to any one game or franchise. We are grateful to our customers and stakeholders for their unwavering support as we continue to execute to strategy.
Reaffirms 2025 Financial Targets
Most importantly, our decision to stop commercializing and offer to remove Jewel of the Dragon is not expected to have a material effect on our revenue, nor our commitment to delivering our
Additional Background Regarding the Litigation
Aristocrat originally made claims with respect to two Light &Wonder games in its complaint filed on February 26, 2024, a trade secret misappropriation claim on Dragon Train and trade dress, copyright infringement and related claims on Jewel of the Dragon. In its first amended complaint filed in July 2024, Aristocrat added references to trade dress issues relating to Dragon Unleashed Link.
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Represents a non-GAAP financial measure. Additional information on non-GAAP financial measures presented herein is available at the end of this release. |
On September 23, 2024, the
Following the
That review has not identified any evidence of similar issues for hold and spin games released from mid-2021, when Emma Charles joined Light & Wonder, through to the present.
As previously announced, we are hosting an investor conference call and simultaneous webcast with the event details listed below.
Investor Conference Call
April 2, 2025
4:30 p.m.
April 3, 2025
7:30 a.m. Australian Eastern Daylight Time
To pre-register, click here: Light & Wonder Litigation Update Conference Call
Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to the call start time.
Webcast
To access the live webcast of the call, please visit the Company’s website at https://explore.investors.lnw.com and click on the webcast link. A replay of the webcast will be available approximately one hour after the webcast and will be archived on the Company’s website.
Telephone Dial-in
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About Light & Wonder
Light & Wonder, Inc. is the leading cross-platform global games company. Through our three unique, yet highly complementary businesses, we deliver unforgettable experiences by combining the exceptional talents of our 6,500+ member team, with a deep understanding of our customers and players. We create immersive content that forges lasting connections with players, wherever they choose to engage. At Light & Wonder, it’s all about the games. The Company is committed to the highest standards of integrity, from promoting player responsibility to implementing sustainable practices. To learn more visit www.lnw.com.
You can access our filings with the Securities Exchange Commission (“SEC”) through the SEC website at www.sec.gov, with the Australian Securities Exchange (“ASX”) through the ASX website at www.asx.com.au or through our website, and we strongly encourage you to do so. We routinely post information that may be important to investors on our website at explore.investors.lnw.com, and we use our website as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s Regulation Fair Disclosure.
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Forward-Looking Statements
In this press release, Light & Wonder makes “forward-looking statements” within the meaning of the
Non-GAAP Financial Measures
Consolidated AEBITDA
Consolidated AEBITDA, as used herein, is a non-GAAP financial measure that is presented as a supplemental disclosure of the Company's operations and is reconciled to net income as the most directly comparable GAAP measure. Consolidated AEBITDA should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP, and should be read in conjunction with the Company's financial statements filed with the SEC. Consolidated AEBITDA may differ from similarly titled measures presented by other companies.
Consolidated AEBITDA is reconciled to Net income attributable to L&W and includes the following adjustments, as applicable: (1) Net income attributable to noncontrolling interest; (2) Restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) Management restructuring and related costs; (iii) restructuring and integration (including costs associated with strategic review, rebranding, divestitures, SciPlay acquisition and ongoing separation activities and related activities); (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition- and disposition-related costs and other unusual items; (3) Depreciation, amortization and impairment charges and Goodwill impairments; (4) Loss on debt financing transactions; (5) Change in fair value of investments and Gain on remeasurement of debt and other; (6) Interest expense; (7) Income tax expense (benefit); (8) Stock-based compensation; and (9) Other (income) expense, net, including foreign currency gains or losses and earnings from equity investments.
Consolidated AEBITDA Target denotes a non-GAAP financial measure. We are not providing a forward-looking quantitative reconciliation of targeted Consolidated AEBITDA to the most directly comparable GAAP measure because we are unable to do so without unreasonable efforts or to reasonably estimate the projected outcome of certain significant items. These items are uncertain, depend on various factors out of our control and could have a material impact on the corresponding measures calculated in accordance with GAAP.
Adjusted NPATA
Adjusted NPATA, as used herein, is a non-GAAP financial measure that is presented as a supplemental disclosure of the Company's operations and is reconciled to net income as the most directly comparable GAAP measure. Adjusted NPATA should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP, and should be read in conjunction with the Company's financial statements filed with the SEC. Adjusted NPATA may differ from similarly titled measures presented by other companies.
Adjusted NPATA is reconciled to Net income attributable to L&W and includes the following adjustments, as applicable: (1) Net income attributable to noncontrolling interest; (2) Amortization of acquired intangible assets; (3) Non-cash asset and goodwill impairments; (4) Restructuring and other, which includes charges or expenses attributable to: (i) employee severance; (ii) Management restructuring and related costs; (iii) restructuring and integration (including costs associated with strategic review, rebranding, divestitures, SciPlay acquisition and ongoing separation activities and related activities); (iv) cost savings initiatives; (v) major litigation; and (vi) acquisition- and disposition-related costs and other unusual items; (5) Loss on debt financing transactions; (6) Change in fair value of investments and Gain on remeasurement of debt and other; (7) Income tax impact on adjustments; and (8) Other expense (income), net, including foreign currency gains or losses and earnings from equity investments.
Adjusted NPATA targeted range for fiscal year 2025 denotes a non-GAAP financial measure. We are not providing a forward-looking quantitative reconciliation of Adjusted NPATA targeted range to the most directly comparable GAAP measure because we are unable to do so without unreasonable efforts or to reasonably estimate the projected outcome of certain significant items. These items are uncertain, depend on various factors out of our control and could have a material impact on the corresponding measures calculated in accordance with GAAP.
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Source: Light & Wonder, Inc..