Casinos approved for landmark antitrust arbitration class against Light & Wonder

More than 100 casinos pursuing litigation against gaming machine manufacturer Light & Wonder have been approved to move forward as a class in a single arbitration before one arbitrator. 

A recent ruling by American Arbitration Association (AAA) arbitrator John Wilkinson certified the casinos as a class, avoiding the need for more than 100 separate proceedings. This move opposed Light & Wonder’s claim that the individual arbitration contracts are too dissimilar to allow the class to be certified.

The casinos contend that the company leaned on faulty patent claims to establish a pseudo-monopoly in the market for card-shuffling machines. The original litigation was brought in 2020 by the Tonkawa Indians of Oklahoma, a tribal casino operator, which claimed Light & Wonder (back then known as Scientific Games Corp.) was overcharging casino operators for card-shuffling devices.

In that suit, the tribe asserted that Scientific Games exerted a monopoly over that niche, stifling competitors and all but forcing casino operators to buy the company’s products.

Class arbitration the "most efficient" method

In reaching his decision, Wilkinson said that having more than 100 cases pursued against Light & Wonder wouldn't be practical. "Class arbitration is by far the fairest and most efficient method for resolving the antitrust claims of proposed class members,” he wrote in his decision.

There are roughly 112 members of the proposed class in this arbitration, Wilkinson noted, which is "far in excess of what is required" for a class action since Second Circuit courts have held that numerosity is presumed for classes larger than 40 members.

Attorneys for L&W previously argued that the arbitrator ignored precedent and didn't take into consideration that each prospective member of the class likely had different contentions. However, Wilkinson noted in his new opinion that differences among the class members are "narrow", thus providing no basis for decertifying the class.

The casinos are thus now members of what appears to be the first-ever certified antitrust arbitration class, reports Reuters. The milestone is all the more remarkable because it comes after the U.S. Supreme Court more or less obliterated classwide arbitration in its 2019 ruling in Lamps Plus, Inc. v. Varela.

Light & Wonder is also contending with a similar suit in federal district court in Chicago. In that instance, more than 1,000 casinos brought antitrust claims similar to those found in the case heard by the AAA.