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Casinos Granted Class Arbitration in Antitrust Claims Against Light & Wonder

By  |  December 19, 2024

In a significant decision for the gambling industry, more than 100 casinos alleging antitrust violations by Light & Wonder (formerly known as Scientific Games) have been certified to proceed as a class in arbitration. The ruling, issued by American Arbitration Association (AAA) arbitrator John Wilkinson on December 9 and made public Tuesday, dismissed arguments by the automated card-shuffling machine company that individual arbitration was the only appropriate course of action.

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    According to Reuters, Wilkinson emphasized that a single, unified arbitration is the most efficient and equitable way to resolve the antitrust claims. The casinos allege that Light & Wonder engaged in sham patent litigation to monopolize the market for its card-shuffling machines. Wilkinson noted that individual proceedings for each casino could lead to inconsistent legal conclusions and would conflict with the AAA’s principle of cost-effective dispute resolution.

    “Class arbitration is by far the fairest and most efficient method for resolving the antitrust claims of proposed class members,” Wilkinson stated in the ruling. He also criticized Light & Wonder’s argument that differences in individual arbitration contracts precluded class certification, noting that the contracts contained broad language directing all disputes to arbitration. Wilkinson concluded this language was sufficiently expansive to encompass class claims.

    Legal Challenges and Broader Implications

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    Light & Wonder has repeatedly challenged Wilkinson’s interpretation. According to Reuters, the company previously sought to overturn his 2022 decision in New York State Supreme Court, asserting that he had “manifestly disregarded” legal precedent established in Lamps Plus Inc. v. Varela. However, both trial and appellate courts upheld Wilkinson’s ruling, siding with the casinos.

    Read more: Second Price-Fixing Case Against Hotel-Casinos Dismissed by Federal Judge

    The company later enlisted high-profile law firm Cravath, Swaine & Moore to argue against class certification under the Lamps Plus precedent. Light & Wonder maintained that variations in the arbitration language among prospective class members’ contracts made class-wide arbitration untenable. However, Wilkinson dismissed this contention, describing it as “based on nothing.” Per Reuters, he noted that Light & Wonder failed to cite any case law or AAA precedent supporting its position.

    A Path Forward

    This decision marks a pivotal moment in the ongoing antitrust litigation. Wilkinson’s ruling underscores the potential of class arbitration to streamline complex disputes involving multiple parties, particularly in cases where inconsistent individual rulings could undermine the integrity of the process.

    For the casinos, the class arbitration format provides an opportunity to collectively challenge Light & Wonder’s alleged monopolistic practices without the burden of pursuing over 100 separate proceedings. Meanwhile, the outcome of the case could set a significant precedent for arbitration in antitrust disputes, especially in industries where broad arbitration agreements are commonplace.

    Source: Reuters