Aristocrat accuses newcomer Light & Wonder of ripping off Dragon-themed pokies game

A ferocious legal brawl over one of the poker machine industry’s biggest cash cows has broken out, with two powerful Australian gaming developers at war over a hyped new game.

Former Aristocrat CFO and Light & Wonder board member Toni Korsanos with former Aristocrat chief and Light & Wonder executive chair Jamie Odell. Picture: Britta Campion

A ferocious legal brawl over one of the poker machine industry’s biggest cash cows has broken out, with two of Australia’s most powerful gaming developers at war over a blockbuster game.

Light & Wonder – the ASX-listed gaming newcomer led by veteran industry executive Jamie Odell and backed by richlister Will Vicars – has been hit with a lawsuit by rival Aristocrat.

It’s been accused of breaching Aristocrat’s trade secrets and intellectual property and poaching the company’s game developers to build its hyped new game, Dragon Train.

In an industry where the bells and whistles of a game, alluring graphics and the siren-song ring of jackpots are key to winning over patrons to decide the difference between success and failure, Aristocrat has locked horns with billion-dollar upstart Light & Wonder.

It fears Light & Wonder’s alleged copycat Dragon Train game will win over venues, customers and threaten its dominance in the crucial US market as well as in Australia, where it is the leading pokies ­provider.

Former Aristocrat CEO Jamie Odell, who is now executive chair of Light & Wonder.

In an increasingly nasty legal brawl over the creation and originality of the Dragon Train game, Aristocrat has detailed in court documents a concerted effort and pattern of improper behaviour by Light & Wonder.

The spat goes back at least two years to gain a “free ride” on the highly confidential and valuable trade secrets that sit behind its own successful and similarly named pokies game, Dragon Link.

In a blistering series of court documents it has labelled Light & Wonder’s successful Dragon Train game a “knock-off” of its own Dragon-themed game series that was part of a long-running pattern of copying, and argued Light & Wonder’s game was built on the misappropriation of intellectual property.

It could make for a particularly bruising courtroom encounter given Mr Odell, the executive chairman of Light & Wonder, is the former CEO of Aristocrat and has populated his new gaming venture with ex-Aristocrat directors, executives and software developers including making an ex-Aristocrat US executive his CEO.

Aristocrat’s trade secret claims stem from concerns that confidential information about the underlying maths and functionality of Aristocrat’s Dragon Link game were used to develop Dragon Train, its lawyers said.

Lawyers for Aristocrat argue Dragon Train has remarkably similar game elements – such as the game rules, symbol sets, pay tables and bonus features – all of which bear on the game maths, has a similar gameplay experience or “feel”, suggesting similar underlying maths that is unlikely to result from coincidence or legitimate reverse engineering. They also argue Light & Wonder’s game was designed by a former Aristocrat game designer, Emma Charles, who had worked on Dragon Link and Lightning Link, another enormously successful Aristocrat game whose maths is similar to Dragon Link.

The $30bn Aristocrat is the global leader in pokies development with Light & Wonder, which is valued at about $13.75bn, the new No.2 in the sector and snapping at Aristocrat’s heels.

Tensions between the two had been simmering for months, The Australian can reveal, as lawyers for each camp traded prickly letters. US lawyers for Aristocrat Technologies, owned by Aristocrat Leisure, in January initially demanded a trove of internal documents from Light & Wonder to discover the extent to which its intellectual property had been misappropriated, and in particular the hiring of two ex-Aristocrat game developers who worked on its Dragon-themed game.

Light and Wonder CEO Matt Wilson, who is based in Las Vegas. Picture: Britta Campion

“Given the remarkable similarities between Dragon Train and Dragon Link, it is at least plausible – if not likely – that Ms (Emma) Charles and/or Lloyd Sefton (another former Aristocrat employee whom Light & Wonder has hired) used Aristocrat’s intellectual property, including trade secrets, other confidential information, and copyrighted materials, in developing Dragon Train,” Aristocrat’s lawyers wrote.

The demand for documents was dismissed as a “fishing expedition” by Light & Wonder’s Washington DC-based lawyers, who flat out refused to share internal documents and in response quipped, “there are no fish here”. Furthermore, they said, they would not hand over sensitive information to a competitor.

This only served to raise the hackles of Aristocrat even more, with its lawyers writing back stating that Light & Wonder’s shielding of these documents from Aristocrat’s US counsel “makes little sense unless Light & Wonder is worried about what those documents reveal”. This was especially the case given in a separate but related court action in Australia’s Federal Court Light & Wonder had handed over some documents to Aristocrat related to the development of Dragon Train.

With that avenue exhausted and given the looming launch of the rival Dragon Train game in the US, Aristocrat leapt ahead to take action in the US courts late last month. In sensational court documents lodged with the District Court of Nevada, and obtained by The Australian, Aristo­crat has levelled a string of accusations against Light & Wonder of misappropriating its intellectual property, copying Dragon Link’s copyrighted audiovisual elements, copying Dragon Link’s game mechanics and gameplay, copyright infringement and deceptive trade practices.

It is seeking expedited discovery of that trove of Light & Wonder documents that it believes will reveal the true genesis of the Dragon Train game and its shared maths, software and functionality – or for the punter, the “look” and “feel” of the pokies game – with its own Dragon Link pokies game.

With its early success it has drawn the attention of Aristocrat. Light & Wonder chief executive Matt Wilson last year had championed the company’s Dragon Train game series as the most popular new gaming machine product in Australia, but the fact Light & Wonder is stacked with former Aristocrat executives, including Mr Wilson and Mr Odell, and highly prized game developers has raised alarm bells for Aristocrat.

Thrust into the centre of the messy legal dispute is Light & Wonder executive chairman Mr Odell, who is the former CEO of Aristocrat Leisure and who led its highly successful global expansion last decade. He’s not the only Aristocrat alumnus on the Light & Wonder board. In fact, there are four. Also on the Light & Wonder board is former Aristocrat chief ­financial officer and strategy executive Toni Korsanos, as well as its CEO Mr Wilson, who ran the Americas for Aristocrat, and Stephen Morro, who served as a non-executive director of Aristocrat for a decade, including as lead US director.

Funds manager Will Vicars who is an investor in the $13.74bn ASX and Nasdaq listed Light & Wonder.

Another Light & Wonder ­director is Hamish McLennan, the chair of real estate web portal REA Group, the former chair of Rugby Australia and a corporate veteran of the Australian media industry.

Shares in Light & Wonder, which are also listed on the Nasdaq, have enjoyed market darling status of late. Its stock is up 67 per cent since it joined the ASX early last year. This has been highly rewarding for its backers, which include funds manager Caledonia run by richlister Mr Vicars.

But now the driving force behind much of that success, its blockbuster Dragon Train game, is the subject of litigation between the arch rivals with stinging allegations of pinching of intellectual property and copyright infringement being flung within the US legal system.

“Rather than attempting to create their own successful game, defendants (Light & Wonder) have repeatedly sought to free-ride on the success of Aristocrat’s Dragon Link,” reads the opening salvo in Aristocrat’s legal case before the Nevada courts.

“Over the last several years, Light & Wonder has hired a number of former Aristocrat executives and game designers. With these former Aristocrat employees at the helm, Light & Wonder has launched a series of copies of Aristocrat’s most popular game, Dragon Link.

“After hiring numerous former Aristocrat employees, including many executives and game designers, Light & Wonder began taking aim at Dragon Link by misappropriating Aristocrat’s intellectual property: first by copying Dragon Link’s trademarked name with a game called Dragon Unleashed Link, then by copying Dragon Link’s copyrighted audiovisual elements and distinctive trade dress with a game called Jewel of the Dragon, and most recently by copying Dragon Link’s game mechanics and gameplay – which are based on valuable Aristocrat trade secrets – with a game called Dragon Train.”

Aristocrat’s lawyers stated Light & Wonder sought to emulate Dragon Link’s gameplay and mathematical characteristics.

“But the evidence suggests Light & Wonder did not do so through legitimate means. Aristocrat has serious concerns that, in fact, Light & Wonder used Aristocrat’s trade secrets and confidential information to develop Dragon Train,” they said.

“Light & Wonder has repeatedly sought to free-ride on the success of Dragon Link … this unlawful pattern of copying Dragon Link, following the arrival of many former Aristocrat executives, makes it even more likely that Light & Wonder’s latest Dragon Link knock-off was also achieved by use of Aristocrat’s intellectual property.”

A spokesman for Light & Wonder told The Australian the court actions were “entirely without merit” and that it would be vigorously defending against them, including seeking the dismissal of this “baseless lawsuit”.

Light & Wonder is expected to file its defence in the coming days.

Originally published as Aristocrat accuses newcomer Light & Wonder of ripping off Dragon-themed pokies game