Light & Wonder will withdraw its Jewel of the Dragon slot game as the company continues to deal with the fallout from Aristocrat’s Dragon Train lawsuit.
Light & Wonder will withdraw its Jewel of the Dragon slot game, as the company continues to deal with the fallout from Aristocrat’s Dragon Train lawsuit.
The land-based and online gaming supplier held a call with investors yesterday (2 April) during which CEO Matt Wilson highlighted the board previously undertook a third-party audit by an independent expert that did not identify any further potential legal issues for the company’s hold and spin games.
The news follows Aristocrat naming Jewel of the Dragon in its 14 March amended complaint against the company, which resulted in Light & Wonder’s share price cratering 20% at the end of the month.
In the complaint, Aristocrat’s attorneys said: “L&W’s misappropriation of Aristocrat trade secrets extends well beyond the use of confidential Aristocrat math information to develop Dragon Train.
“Aristocrat’s information has been widely disseminated throughout L&W and has been used by L&W employees to develop other games, including, but not limited to, Jewel of the Dragon, Double Dragon, and at least one unreleased game.”
In response to this, the business said it would pull Jewel of the Dragon from its portfolio, which has a limited footprint, “to minimise any confusion and potential disruption to our customers”.
Light & Wonder added that early versions of the referenced unreleased game may have included aspects of Aristocrat’s maths, which it said will be pulled for the sake of safety.
Light & Wonder highlights PAR sheet issue
Chief executive Matt Wilson said after the complaint was submitted that the business discovered certain Aristocrat PAR sheets from 2015 that would have been available to the slot’s development team at the time.
These sheets, he explained, are used by suppliers to describe slot games and, as well as being provided to customers, have often ended up in the hands of competitors.
As such, Wilson said the business would be expanding the scope of the third-party audit to include all hold and spin games released prior to mid-2021, which was when the former Aristocrat designer at the centre of the lawsuit, Emma Charles, joined the company.
He said: “We are working to complete this process as quickly as possible and 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.
“We expect completion of this review within four weeks and to provide an update on the review in conjunction with our upcoming earnings call.”
In a press release accompanying the call, Light & Wonder went into more detail about the specifics of the litigation, which it said it intended to “vigorously” defend against.
These included allegations Charles had sent emails to other Light & Wonder team members.
Regarding these, the business said it has not uncovered any evidence of legal issues that could affect other games related to the emails.
Wilson added: “What we’re dealing with here is a legacy issue that pre-dates Dragon Train effectively, so it’s similar yet unrelated. The mandate is clear. The design teams understand we’ve enhanced protocols looking at personal devices as new game designers join the organisation.
“Dragon Train and then to a lesser extent, Jewel of the Dragon, is a very public reminder that there are consequences and that we have to be vigilant when it comes to maintaining the highest standard of governance.”
Analyst take: company has addressed ‘contagion’ concerns
Analysts at Truist Securities said Light & Wonder’s response may have gone some way to calming the market.
Barry Jonas wrote in an investor note: “The call should help allay ‘contagion’ concerns with LNW clearly articulating their case and we think for now putting investors more at ease.
“Irrespective, LNW has removed any games remotely questionable. While immaterial financially, this also highlights wide content diversification with the company also reiterating yet again its 2025 $1.4bn AEBITDA target.”