Australian-based gaming manufacturer Aristocrat Technologies has settled its lawsuit related to Big Fish Games, a social casino operator in Washington State. The deal was approved by the Federal District Court for the state’s Western District. At the company’s annual meeting, Chairman Neil Chatfield looked ahead.
In a filing to the Australian Stock Exchange, Aristocrat disclosed the resolution of the agreement to settle claims related to two lawsuits brought by Cheryl Kater, Suzie Kelly and Manasa Thimmedowda.
The lawsuits were filed against online social gaming platforms Big Fish Casino, Jackpot Magic Slots and Epic Diamond Slots, all offered by Big Fish Games, a company Aristocrat acquired from Churchill Down Inc. (CDI) in 2018 for $990 million.
The payment linked to the agreement totaling $155 million was split between the former owner of Big Fish, CDI, which agreed to pay $124 million, and the social games brands’ current owner Aristocrat, which agreed for payment on the remaining $31 million.
The lawsuit was initially launched against CDI in 2015 by Kater, who claimed she had lost $1,000 while playing social games from her mobile phone. She argued the social games platform was in fact offering games of chance, which are prohibited by law in Washington. A U.S. District Court judge in Seattle denied her case in 2016, but Kater took it to the U.S. Court of Appeals, which ruled that virtual chips represented things of value, hence games offered by Big Fish constituted illegal online gambling.
“The District Court has now approved the agreement and terms of settlement. The amount that Aristocrat has paid in settlement of the two lawsuits is US$31 million and is consistent with the relevant item included in Aristocrat’s reported results in its 2020 Annual Report,” Aristocrat said.
Aristocrat last year reported a 31.3 percent increase in revenues from its digital segment, including social casinos, to US$1.61 billion.
At the annual general meeting for shareholders, top officials lauded the company’s performance amid the pandemic shutdowns in fiscal 2020. They also looked ahead to fiscal 2021, beginning with the launch of new technology to promote responsible gaming.
Aristocrat Chairman Neil Chatfield credited an increased focus on strong corporate governance and strategic recruitment for the company’s strong revenue performance amid the pandemic. The supplier recorded net profit after tax for the year ended September 30 of AU$476.6 million (US$348 million), with liquidity in excess of AU$2 billion despite revenues being down 46 percent year-on-year.
“Strong competition for top talent, particularly in the U.S. technology sector and across digital skillsets, only intensified as a result of the pandemic,” Chatfield said, according to Inside Asian Gaming. “Aristocrat was quick to respond, escalating our focus on strategic recruitment and retention, and updating remuneration structures as detailed in the Remuneration Report.
“The board is committed to taking proactive steps to ensure Aristocrat can continue to attract and retain the critical capabilities required to execute our strategy and advance shareholders’ interests, recognizing that we are a globally operating technology business and increasingly a market leader.”
Chatfield also lauded the diversity of the company’s workforce. “We were delighted to be recognized during the year as a top performer in the Chief Executive Women ASX200 Senior Executive Census, in recognition of both our group executive team and board being over 40 percent female,” he said.
Chatfield and Aristocrat Leisure CEO Trevor Croker also used the meeting to preview new responsible game play technology that will be launched in the first quarter this year
“Promoting responsible game play is one of Aristocrat’s most fundamental obligations,” Chatfield said. “It’s a major way that we deliver our company mission to ‘Bring Joy to Life through the Power of Play.’ We believe it’s also key to ensuring we can continue to grow our business, attract and retain great talent, and promote a sustainable games industry that’s welcome in the community.”
Croker said regulators in the Australian states and territories of New South Wales, Queensland and the ACT have now approved the first games to incorporate “Flexiplay” technology, which it plans to roll out during the current quarter.
Flexiplay allows players to voluntarily set time limits and quarantine winnings from being played down via timer and piggy bank functions.
“We are preparing to place the first of these games in market in the first quarter of this year,” Croker said. “Our customers have been very supportive of Flexiplay. We look forward to learning more from the release of Flexiplay and to applying the lessons to further product-based RG innovations in future.
“Aristocrat is proud of our track record of investing in the development and testing of machine-based responsible gaming features. This is just one example, but it speaks to Aristocrat’s approach in this complex area. We seek to lead, we strive to work collaboratively with customers and other stakeholders, and we focus on bringing forward commercially viable options that enhance player empowerment and choice.”
