According to a lawsuit filed in Nevada District Court, Light & Wonder (LNW) violated Evolution’s intellectual property, infringed on its patents, and misappropriated “highly valuable trade secrets” with the release of RouletteX, which the lawsuit claims is “strikingly similar” to Evolution’s Lightning Roulette.
The timeline of the alleged events in the case paints an interesting picture when placed alongside other business events taking place for the two companies. The two had initially explored a partnership, but the relationship appears to have soured around the same time that LNW—then known as Scientific Games (SG)—announced its interest in the live dealer casino space, which forms the core of Evolution’s business. Investor concern over Evolution’s revenue from unregulated markets manifested around the same time, sparked by a complaint filed against Evolution by an unnamed competitor.
Evolution leveled its allegations against LNW last week in a partially redacted filing that details a relationship that shifted from peers to partners, then rivals.
Per the lawsuit, before launching Lighting Roulette in the US, Evolution partnered with LNW to produce a physical version of the game. After signing an agreement and assessing trade secrets, Evolution claims LNW tried to “unilaterally” back out of the deal. Shortly after, LNW released RouletteX and then PowerX, which the documents argue are essentially the same game as Lightning Roulette and its follow-up, XXXtreme Lightning Roulette.
LNW’s actions, Evolution argues, were “malicious, deliberate, and willful.”
Further:
As alleged herein, L&W’s conduct has been and is willful, wanton, and/or reckless. LNW Gaming induced Evolution into providing L&W with Evolution’s trade secrets for Lightning Roulette—Evolution’s highly successful flagship product—under the auspices of entering into a partnership for developing physical Lightning Roulette game tables, but turned around and used those trade secrets to develop its own product, RouletteX and PowerX, knowing that its acts would harm Evolution.
As a result of those acts, Evolution says it faces “an immediate threat of irreparable harm.”
Complaint Captures Shift From Partners to Rivals
Launched in 2018, Lightning Roulette is described by Evolution as one of its most popular and sought-after games. The brief notes that the US Patent and Trademark Office awarded Evolution several patents based on the game’s innovations. The filing specifically named three patents (’024, ’014, and’ 371).
Lightning Roulette, due to its unique formatting and features, has been hugely successful and is enjoyed by millions of players around the world. Indeed, Lightning Roulette is the largest and most profitable roulette game in the world.
As the filing explains, Evolution sought to build on the success of Lightning Roulette’s live online version by bringing the game to land-based casinos. After initially negotiating with a competitor, Evolution says LNW expressed interest in partnering on the brick-and-mortar version of the game.
Ultimately, Evolution and LNW came to terms and signed an agreement to develop a retail version of Lighting Roulette in March 2021. Evolution says it was “extremely important” that the game be ready for January 2022 to coincide with its US online launch.
Between March and August, Evolution claims LNW led it to believe it was developing the table games according to the agreement. However, in August, LNW attempted to “unilaterally” terminate the deal, “much to Evolution’s surprise.” Around the same time, Evolution says it also learned LNW was already telling its customers the deal was kaput.
More disturbingly, Evolution says that shortly after, LNW announced the launch of its “copycat” roulette game, RouletteX, in online and physical formats, Evolution says. A physical format like the table version LNW was supposed to build for Lightning Roulette.
Evolution Claims LNW Used its Proprietary Tech
As Evoution details, it believes LNW used its patented intellectual property to build its version of Lightning Roulette (RouletteX). In particular, the filing references the math calculations underpinning the tech.
The company argues it “spent significant time and resources” developing Lightning Roulette’s mathematic foundations, and its success is attributable, in part, to those files.
This information is proprietary, unique to the Lightning Roulette game, and cannot be readily ascertained through proper means, including by observing the Lightning Roulette features or by playing the game. The proprietary information allows, among other things, the game to remain profitable despite the inclusion of multipliers with increased payouts and increases player engagement with the game.
The proof, Evolution claims, is in the striking similarity of the final products.
RouletteX’s appearance, features, and functionality are strikingly similar to Lightning Roulette. For example, RouletteX—like Lightning Roulette—randomly selects up to five roulette numbers and assigns multipliers from 50x to 500x to those randomly selected numbers for each roulette spin. RouletteX even identifies these randomly selected numbers with an animated lightning strike, like Lightning Roulette.
Due to LNW’s alleged misappropriation, Evolution says its threat of harm is immediate and irreparable.
Evolution faces an immediate threat of irreparable harm, for which Evolution lacks an adequate remedy at law, for L&W’s misappropriation and misuse of Evolution’s trade secret information, including, but not limited to, reputational harm, loss of future business, and the potential that Evolution’s trade secrets may be disseminated (e.g., to L&W’s contractors) beyond the Court’s ability to provide monetary redress.
As remedy, Evolution has asked for a declaration that LNW infringed its patents. It also seeks an injunction to prevent further infringement, damages, and other legal costs.
Notably, the compensatory, exemplary, and punitive damages requested are double or treble (triple) of the company’s actual loss.
Lawsuit Follows Period of Upheaval
Perhaps coincidently, Evolution has encountered other bumps in the road during the same timeframe.
In November 2021, an unnamed “US-based competitor” filed a complaint against Evolution with the New Jersey Division of Gaming Enforcement (DGE). The complaint alleged Evolution knowingly overlooked the use of its games in countries where gambling is illegal. Further, the complaint suggests that some countries align with terrorism, according to US classifications.
While the DGE eventually cleared Evolution of wrongdoing this past February, in the wake of the complaint, Evolution stocks took a temporary beating.
Only a few months later, in January 2022, a short seller report from The Analyst targeted Evolution and its alleged unregulated market activities. That time, the accusations wiped away more than $2 billion in stock value.
The identity of the competitor leveling the accusations against Evolution remains unknown. However, LNW (and its predecessor, SG) has frequently spoken against companies that straddle regulated and unregulated worlds.
In 2019, SG filed a complaint with the Oregon Lottery after it selected competitor SBTech (over SG) to operate sports betting in the state. The bid protest urged state officials to examine SBTech’s international ties and business practices. Further, as recently as this past March, during a panel at Next Summit New York, LNW’s head of governmental affairs, Howard Glaser, slammed suppliers operating in active terror states.
Importantly, neither Glaser nor LNW has ever mentioned Evolution by name.
Still, the timing of the parallel events begs questioning.
Evolution didn’t immediately return Bonus‘s request for comment.
A spokesperson for LNW provided the following:
We are aware of the filing of the lawsuit by Evolution. As has been our practice, we do not comment on ongoing litigation, but what I can say is that we do not believe the claims have any merit and intend to vigorously defend against them.
Timeline of Evolution’s Feud With Light & Wonder
Here’s how the events from March 2021 to February 2022 look when placed on a single timeline:
March 2021
- Evolution and Scientific Games (now LNW) enter a Lightning Roulette development deal, aiming for a January launch.
August 2021
- Scientific Games attempts to terminate the Lightning Roulette deal.
September 2021
- Scientific Games launches RouletteX.
November 2021
- Unknown competitor files complaint against Evolution with DGE.
- Scientific Games acquires Authentic Gaming, announces live dealer plans.
- Evolution’s stock briefly plunges by more than 30% before partially recovering.
January 2022
- Originally intended date for the roll-out of the physical Lightning Roulette product.
- The Analyst’s report on Evolution comes out, and Evolution’s stock drops again.
February 2022
- Evolution issues its first cease-and-desist to Scientific Games for Roulette X
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