Light & Wonder Inc. Provides Update on Ongoing Dragon Train Litigation
April 2, 2025 – Light & Wonder, Inc. (NASDAQ and ASX: LNW) has released a detailed update regarding its ongoing legal battle with Aristocrat in the U.S. District Court of Nevada, centered on claims of trade secret misappropriation related to their game *Jewel of the Dragon*. This press release highlights the company’s legal strategy, its commitment to transparency, and reassures stakeholders about its financial targets for 2025.
1. Overview of the Litigation
On March 14, 2025, Aristocrat filed a second amended complaint against Light & Wonder, adding a new claim of trade secret misappropriation concerning *Jewel of the Dragon*. Previously, Aristocrat's claims were limited to other issues without mentioning trade secrets. Light & Wonder intends to respond to this amended complaint by April 11, 2025.
Key Claims and Light & Wonder's Defense
The latest complaint from Aristocrat raises several points that Light & Wonder plans to counter vigorously:
- Replacement Games: Aristocrat asserts that new games developed as replacements for the *Dragon Train*, including *Dragon Train Grand Central*, would benefit from misappropriated trade secrets, regardless of whether those secrets are actually used in the new games. Light & Wonder argues that many elements contributing to the success of *Dragon Train* are uncontested and that they have taken measures to ensure that new games do not infringe on any of Aristocrat's claimed trade secrets. Notably, the company provided the mathematical framework for *Dragon Train Grand Central* to Aristocrat prior to its launch and is confident that similar transparency will apply to their new land-based game currently under development.
- Internal Communications: The amended complaint references emails from Emma Charles, the game designer for *Dragon Train*, which were disclosed during the discovery process. Light & Wonder has conducted an investigation into these communications and found no evidence of misconduct affecting other games developed by the company.
- Unreleased Game Concerns: Aristocrat has mentioned an unreleased game that was part of Light & Wonder’s product pipeline. Light & Wonder acknowledged that an early version of this game had potential issues relating to Aristocrat and decided to halt its development to proactively address any concerns.
Trade Secret Claim and Immediate Actions
For the first time, Aristocrat has included a trade secret claim against *Jewel of the Dragon*. In response, Light & Wonder voluntarily decided to stop commercializing *Jewel of the Dragon* and offered to replace it for customers, aiming to minimize disruption amid the ongoing litigation. This game has a minimal market presence, comprising less than 1% of the total Premium installed base in North America, with approximately 150 premium leased units.
In their due diligence, Light & Wonder identified certain historical performance analysis reports (PAR sheets) from Aristocrat that may have been accessible to some developers of *Jewel of the Dragon*. The company is expanding its internal review to include all hold and spin games released before mid-2021, ensuring that no similar issues exist.
2. Financial Outlook and Commitment to Growth
Despite the legal challenges, Light & Wonder reaffirmed its financial targets for 2025, projecting a Targeted Consolidated AEBITDA of $1.4 billion and an Adjusted NPATA between $565 million and $635 million. The company emphasizes that the cessation of *Jewel of the Dragon* is not expected to materially impact revenue or future growth.
Moreover, these targets are affirmed without accounting for any potential contributions from the upcoming acquisition of Grover Gaming's Charitable business, which is anticipated to close in Q2 of this year.
3. Conclusion
Light & Wonder remains committed to its strategic objectives and the continuous development of its gaming portfolio, asserting that the company's diverse franchise offerings provide a competitive edge. The firm expressed gratitude for the support from its customers and stakeholders as it navigates these legal challenges.
The company is set to discuss further details during an investor conference call on April 2, 2025, at 4:30 p.m. ET, reinforcing its dedication to transparency and stakeholder engagement.
As the litigation unfolds, Light & Wonder's commitment to innovation and integrity will be critical in maintaining its position as a leading player in the gaming industry.
