Aristocrat-related litigation with Light & Wonder labeled as "backdrop" by Jefferies analyst
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Slug it out between Aristocrat and Light & Wonder!
The ongoing legal schism between Aristocrat Leisure and Light & Wonder has taken a turn in the latter's favor, as Jefferies Equity Research analyst, David Katz, asserts. In a blunt statement on June 25, Katz proclaimed, "This latest court decision is an incremental positive for Light & Wonder."
Seems the Nevada district court has commanded Aristocrat's recent discovery request to back off—deeming it too broad and not warranting universal math model disclosure from Light & Wonder's hold-and-spin games. Aristocrat must explicitly specify the trade secrets it seeks to protect.
But, hey, for Katz, it's all just "background noise in the near term, financially limited." Thing is, these two are the only game developers in town for now, which Katz thought is the key point everyone should keep in mind.
Biting the bullet, Aristocrat and Light & Wonder have been ordered by the court to hash things out. The root of the contention comes from an ex-Aristocrat game developer's work with Light & Wonder on their retired Dragon Train and Jewel of the Dragon slot games. Aristocrat's allegations claim Light & Wonder swiped trade secrets during the game design process.
Katz added that the lawsuit, though par for the course, is more significant than others owing to Light & Wonder's bragging about its game development studios, which have made a splash in numerous other companies – including Aristocrat's. And, let's be real, Light & Wonder's brawl has magnified to a higher level than initially perceived earlier.
He went on to say that the competition is as cutthroat as ever. With both companies vying for top positions as the only two massive game developers worldwide, Light & Wonder might just pay a substantial albeit manageable penalty to Aristocrat. This, stating Katz, would not sway his investment theses on either company.
Worth noting, earlier complaints were squashed by the court in Light & Wonder's favor. Light & Wonder’s shares surged both on the US stock market and the Australian Securities Exchange in response to this ruling, with fancy figures like 9.5% and 13.5% jumps. On the flip side, Aristocrat shares took a tumble.
Regardless, the tussle remains, with the possibility of an Aristocrat appeal on the cards ahead of the 2026 trial.
Sources:
- gamingintelligence.com
- reuters.com
- cnbc.com
- bloomberg.com
- businessinsider.com
- The ongoing legal dispute between Aristocrat Leisure and Light & Wonder, as analyzed by Jefferies Equity Research, could have financial implications for both companies in the business sector.
- The competition between Aristocrat and Light & Wonder, as the only two major game developers, could lead to potential significant penalties for Light & Wonder, according to Jefferies Equity Research analyst, David Katz, but this would not alter his investment theses on either company.
