Card Shuffling Tech Company Sued For Monopolization

On Tuesday in the Northern District of Illinois, plaintiff Rancho’s Club Casino (doing business as Magnolia House Casino) filed a class-action complaint against defendants Scientific Games Corporation Bally Technologies and Bally Gaming for their “alleged monopolization of the market for automatic card shufflers used at casinos through Defendants’ abuse of the patent system and judicial process to exclude and drive out competitors from the market.”

The defendants, collectively called Bally, “manufacture and sell fully automated card shufflers under the Shuffle Master, DeckMate, and Bally names” to “produce reliably random shuffles,” as hand shuffling is illegal in many areas. In particular, the plaintiff averred that the defendants have purportedly “procured patents by fraud and then asserted those patents in sham lawsuits against competitors,” in effect keeping competitors out of the market and causing the plaintiff and others “to pay more for automated card shufflers than they otherwise would have in a competitive market.” Additionally, Rancho’s proffered that the defendants also achieved their market size through acquiring its competitors.

Moreover, the plaintiff cited a similar suit from the defendants’ “would-be competitors,” such as other automated card shuffler manufacturers and distributors; the litigation had similar monopolization allegations. Furthermore, Rancho’s noted that in that suit in 2018 the jury issued a verdict against the defendants for Sherman Act Section 2 violations and the competitors were awarded $105 million in damages, trebled for a sum total of $315 million. The plaintiff also pointed out another similar suit, where the defendants’ motion to dismiss was denied. According to Rancho’s the automated card shuffler and related products and services market is around $100 million per year, meanwhile the defendants “now control virtually 100% of that market as a result of their misconduct.”

Consequently, the plaintiff claimed that “the market is no longer competitive for these machines,” which has enabled the defendants “to set prices without fear of competitors undercutting them or stealing market share.” According to the complaint, there are also high barriers to enter the market. The plaintiff asserted that it has been harmed by this alleged conduct because it purchases automated card shufflers and as a result of the defendants’ purported monopolization, has forced the plaintiff and other purchasers to pay supracompetitive prices for these machines.

The plaintiff has sought to maintain a class action, for the court to adjudge and decree that the defendants’ alleged conduct violated Sections 2 and 3 of the Sherman Act, declaratory judgment in its favor, an award for treble damages, an injunction against the defendants from further violations, and other relief.

Rancho’s Club Casino is represented by Clifford Law Offices, P.C., Hausfeld LLP, and Mitchell DeClerck PLLC.