Brands Battle Over Cashless Patents

Sightline Payments says Everi infringed on five cashless gaming patents. Its lawsuit has observers wondering if intellectual property cases will proliferate as in the 1990s, when claims over slot features were common.

Brands Battle Over Cashless Patents

Las Vegas-based Sightline Payments recently sued Everi Holdings in federal court in Texas, alleging Everi infringed on five of Sightline’s patents regarding cashless gaming—including technology allowing a player to transfer funds from his or her financial account to a digital wallet for gaming play.

Major gaming equipment manufacturers showcased numerous new cashless gaming and digital payment products during the recent Global Gaming Expo in Las Vegas. Todd Eilers, a principal in advisory firm Eilers & Krejcik Gaming, said, “Cashless is something everyone is focused on. I suspect that you will see a lot of intellectual property lawsuits going forward.”

Macquarie Securities Gaming Analyst Chad Beynon said at G2E, officials at most of the privately held gaming equipment companies mentioned they controlled numerous cashless gaming patents. “They believe they have something the others don’t have,” Beynon said.

Sightline claims it holds 35 patents and has 23 additional patent applications pending with the U.S. Patent & Trademark Office regarding its mobile wallet and funds transfer. The privately held company, which secured $350 million in outside financing this year, was one of five gaming technology providers involved in the rollout of cashless gaming at Resorts World Las Vegas when the Strip property opened in June. Partnering with Aristocrat Technologies, Sightline also is part of Boyd Gaming’s cashless wagering rollout at the company’s Las Vegas and regional casinos.

Everi provides cashless gaming through mobile wallet technology at about a dozen casinos in four states. Through its partnership with Penn National Gaming, Hollywood Casino Columbus recently became the first Ohio casino to offer cashless gaming; players can connect their phones to slot machines and table games through the mychoice rewards app. Other properties owned by Penn National Gaming launched similar technology last month. Officials said the company plans to incorporate cashless gaming at Hollywood properties in Toledo, Dayton and Youngstown by the end of October.

In its lawsuit, Sightline said its intellectual property counsel found five violations.

“The asserted patents involve technologies that allow for cashless transactions used in casino gaming offerings and non-gaming spend. These inventions were originally developed by Kirk Sanford, Thomas Sears and Omer Sattar, all co-founders of Sightline. The inventors of the asserted patents recognized that the field could benefit from improved systems and methods for cashless wagering and redemption.”

Sightline Chief Legal Officer Jennifer Carleton stated, “We will vigorously defend our intellectual property against any infringements.”

In response to the lawsuit, Everi General Counsel Kate Lowenhar-Fisher said Sightline’s claims were “without merit. We will vigorously defend Everi against these baseless claims. Additionally, we plan to mount a number of claims of our own against Sightline.”

Slot makers were busy suing each other over patent infringement in the early 2000s. Most of the lawsuits were associated with IGT’s “Wheel of Fortune” slot machine. Bally and several other slot makers also offered bonus wheel-based games. At one point, IGT and Bally had more than a dozen different patent infringement claims against each other.

Former Bally Chief Executive Officer Richard Haddrill said the lawsuits disappeared when the courts ruled a slot machine developer “couldn’t put a patent on a wheel.” He said it’s not likely intellectual property infringement lawsuits would erupt among gaming companies over cashless gaming “unless you have a unique or justifiably defensible patent. I believe the manufacturers are much better now at collaboration.”

Beynon said he hoped payment companies would “agree to cross-license intellectual property as I think it will support the adoption and everyone benefits.” However, he noted, “That typically doesn’t happen at first.”