Light & Wonder is facing a potentially massive class-action lawsuit tied to its alleged monopoly on shuffler technology.
More than 100 casinos have been granted the opportunity to collectively arbitrate antitrust claims against Light & Wonder, which dominates the market for automated card-shuffling machines.
In a ruling first reported by Reuters, arbitrator John Wilkinson of the American Arbitration Association (AAA) certified the casinos as a class. The decision marks a significant moment in the legal battle surrounding antitrust allegations and arbitration practices.
Wilkinson emphasised that class arbitration is the most efficient and fair method to resolve allegations that Light & Wonder engaged in sham patent litigation to monopolise the market for automated card shufflers.
Wilkinson noted that individual arbitration proceedings could result in conflicting outcomes and undermine the cost-effectiveness that arbitration aims to provide.
The certification of this arbitration class is groundbreaking, as it appears to be the first of its kind in an antitrust context. This milestone follows a 2019 US Supreme Court ruling that limited class-wide arbitration by requiring explicit contract language to allow it.
However, Wilkinson determined in a 2022 decision that an arbitration agreement between Light & Wonder and Akwesasne Mohawk Casino Resort was broad enough to permit class arbitration.
Light & Wonder challenged Wilkinson’s interpretation, arguing that the arbitrator disregarded the Supreme Court’s earlier precedent. However, New York state courts upheld that ruling, confirming that the arbitration agreement’s expansive language encompassed class claims.
The company, represented by Cravath, Swaine & Moore, contended that variations in arbitration agreements among the casinos made class certification inappropriate. They argued that the legal validity of class arbitration could not be assumed for all prospective members.
Wilkinson rejected these claims, stating that Light & Wonder failed to provide any legal precedent or examples to substantiate its argument. He described the company’s assertions as unfounded and lacking support in case law.
A possible win for casinos
The decision has significant implications for the casinos, which can now collectively address their complex antitrust claims without the burden of individual arbitration.
According to Michael Eisenkraft, counsel for the Mohawk casino and a partner at Cohen Milstein Sellers & Toll, the ruling ensures the casinos have a fair opportunity to present their case despite Light & Wonder’s attempts to obstruct the process.
Eisenkraft highlighted the importance of class arbitration in handling large-scale disputes efficiently, emphasising its role in levelling the playing field for smaller entities.
Meanwhile, Light & Wonder faces similar challenges in a federal district court in Chicago, where over 1,000 casinos are litigating parallel antitrust claims. These casinos, which did not sign arbitration agreements, are seeking class certification in traditional court proceedings.
The company has opposed this certification, arguing that differences in purchases and harm among the casinos require individual assessments.
US District Judge John Kness has yet to rule on the certification motion, leaving the federal case’s progress slower compared to the arbitration proceedings.
Light & Wonder has announced plans to appeal Wilkinson’s class certification ruling, likely initiating another legal challenge in New York State Supreme Court.