Two Casinos Sue Scientific Games Over Shuffle Master Business Practices

A pair of Midwestern riverboat casinos have filed a class action antitrust lawsuit against Las Vegas-based Scientific Games Corporation, alleging monopolistic practices in the sale and marketing of Shuffle Master automatic card shufflers, which hold a dominant market share in that casino-equipment niche.

Casino Queen Riverboat

DraftKings at Casino Queen is one of two Mississippi riverboat casinos suing Shuffle Master parent Scientific Games over allegedly illegal business practices involved with its automatic card shuffler products. (Image: G3Newswire)

The lawsuit was filed by East St. Louis, Illinois’ Casino Queen, Inc., which operates as DraftKings at Casino Queen, and Marquette, Iowa’s Casino Queen Marquette, Inc., which operates under the same name and was once known as the Lady Luck Casino.

CardsChat News obtained the lawsuit that was filed Friday in the Chicago-based US District Court of Eastern Illinois. It names as defendants Scientific Games, Bally Technologies, Inc., and Bally Gaming, Inc, all of which are based in Nevada, and the related business entities Shuffle Master, Inc. and SHFL Entertainment. The casinos contend that the Scientific Games companies have “procured patents by fraud and then asserted those patents in sham lawsuits against competitors, which effectively excluded competitors from the market.”

By scaring off all the potential manufacturing competition, the casinos assert, Scientific Games had achieved “virtually 100% of that market as a result of their misconduct.”

The company markets its automatic shufflers under the Shuffle Master, DeckMate, and Bally brand names. The lawsuit also asserts that the market for casino-grade automatic card shufflers is worth $100 million per year, and that it is supported by monopoly-based overpricing for Scientific Games’ auto-shuffler products.

Accused of market monopoly, inflated prices

The two riverboat casinos assert that automatic card shufflers are a necessary part of any casino operation, and in some jurisdictions, alternatives such as hand shuffling of decks are barred by law. That means casinos are forced to turn to an auto-shuffler manufacturer, and that in turn means Scientific Games, in the guise of one or another of its various corporate entities and shuffling-machine brands.

The lawsuit also claims that the Scientific Games companies charge inflated prices for their shufflers due to the lack of competition in the US.

The casinos included sales data from 2012 (the last year such data was publicly available), showing that Scientific Games’ shufflers sold for an average of nearly $16,000, or generated about $451/month when leased. The complaint did not note the current prices of Scientific Games’ machines.

‘Sham’ patents and dodgy litigation?

The two casinos’ claim that Scientific Games built its monopoly in phases. First, the company is alleged to have defrauded the United States Patent and Trademark Office (USPTO) in obtaining the patents for its shufflers, by incorporating design features from three earlier shufflers, known as the Nicoletti, Luciano, and Roblejo shufflers. These early auto-shufflers were marketed in the 1990s. The casinos contend that especially in the case of the Roblejo shuffler, which was patented in 1997, Shuffle Master designers stole features and design elements and incorporated them into their own products.

Later in the 2000s, when obtaining their own Shuffle Master patents, the casinos assert that the company, then SHFL, “secreted” artwork from the earlier patents and inserted their own similar artwork. The company then is claimed to have wielded that patent and supporting artwork in lawsuits against would-be competitors who offered allegedly better shufflers at lower price points.

The lawsuit references at least five different cases where Shuffle Master squeezed competitors out of the market through use of those allegedly fraudulent patents. Those cases range from 2003 to 2018, and include a case against Australian shuffler manufacturer CARD, which SHFL later sued, then acquired in a $50 million buyout. Scientific Games’ legal loss for $315 million in 2018 to consumer-grade shuffler maker Shuffle Tech.

Scientific Games and Shuffle Master ultimately reached a settlement with Shuffle Tech, but the cost of the litigation forced Shuffle Tech back to the consumer-only market and ensured Scientific Games’ casino-market monopoly would continue. Nonetheless, the decision rendered in the case before its ultimate settlement supports many of the riverboat casinos’ claims.

The casinos’ lawsuit does not set a specific dollar amount for damages, but claims that potential class members may number “in the thousands”. The lawsuit will also seek triple damages, as called for under Illinois antitrust law, and asks for a jury trial in the matter.

Written by
Haley Hintze
Contributing writer Haley Hintze is a 20-year veteran of the poker world, a Women in Poker Hall of Fame finalist, and two-time Global Poker Awards finalist.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Did you know about our poker forum?

Discuss all the latest poker news in the CardsChat forum