Navigating the Litigious Landscape of the US Gaming Industry: Recent Cases and Lessons Learned

The United States has long been known for its litigious society, often referred to as a "suing culture." This reputation has been fueled by high-profile cases and the sheer volume of lawsuits that seem to originate from the country. The casino and gaming industry is no exception to this trend, as evidenced by the wide range of cases filed in US courts in recent years. While these cases may vary in their specifics, they all share a common theme: the need for vigilance and robust legal support in an increasingly complex and competitive market.

One of the most notable cases in recent months is Light & Wonder vs Aristocrat. Aristocrat, along with its subsidiary Aristocrat Technologies Australia, filed a lawsuit against its rival slot supplier, Light & Wonder, in the District Court of Nevada. The crux of the case revolves around alleged violations of the Defend Trade Secrets Act of 2016, with Aristocrat claiming that Light & Wonder's Dragon Train slot game incorporates trade secrets from Aristocrat's Dragon Link and Lightning Link games. The case is further complicated by the fact that several former Aristocrat employees, including its former CEO Jamie Odell, have since joined Light & Wonder. Light & Wonder has vehemently denied these allegations, vowing to vigorously defend against what it calls a "baseless lawsuit."

Another high-profile case involves Fanatics and DraftKings. Michael Hermalyn, a former SVP at DraftKings, left the company in February 2024 to join Fanatics as President, VP, and Head of the LA Office. In response, DraftKings filed a lawsuit in the District Court of Massachusetts, seeking to bar Hermalyn from working at Fanatics. While the court rejected this request, DraftKings successfully obtained a temporary order prohibiting Hermalyn from utilizing trade secrets or soliciting customers or employees. Hermalyn has countered these claims, accusing DraftKings of having a history of "aggressively" smearing the reputations of former employees who seek better opportunities elsewhere.

The Fontainebleau vs Wynn case further highlights the issue of employee poaching in the gaming industry. Wynn Resorts has accused the newly opened Fontainebleau casino resort of inducing its employees to breach non-compete clauses. Fontainebleau, in turn, has denied these allegations and filed a counterclaim, accusing Wynn of using bullying tactics to prevent employees from leaving. The case has brought to light the intense competition for talent in the industry and the lengths to which some operators may go to protect their workforce.

While these cases are playing out in the US courts, it's important to note that the UK gambling industry has not seen the same level of litigation. The two most significant UK cases in recent years have been between bettors and casinos, rather than B2B disputes. The first involved poker player Phil Ivey, who was accused of cheating at Crockfords Casino in London, while the second saw Betfred refusing to pay out a £1.7m jackpot to Andrew Green due to an alleged software defect.

As the gambling industry continues to globalize, operators must adapt to the legal and cultural norms of the jurisdictions in which they operate. This may include navigating the "suing culture" prevalent in the United States. While no company wants to find itself embroiled in legal disputes, the reality is that a robust legal department and a proactive approach to compliance are essential in today's market.

The most important lesson for operators is to remain vigilant and invest in legal expertise when operating across different jurisdictions. By staying informed about the legal landscape, implementing strong internal controls, and fostering a culture of compliance, companies can minimize their exposure to litigation and focus on delivering exceptional gaming experiences to their customers.