Supplier of gaming technology and platform solutions to the gambling industry GAN filed a lawsuit Monday against MGM Resorts International for allegedly infringing patent rights.
GameSTACK Is Patent-Protected
The complaint filed by GAN in the US District Court for the District of Delaware is seeking damages from MGM Resorts for infringing patent rights related to GAN’s GameSTACK proprietary internet gaming enterprise software system linking land-based casino loyalty programs with respective online rewards schemes.
In essence, the patent covers the technology linking an internet-based gaming system with a land-based casino management system to determine whether loyalty points earned online can be transferred to the land-based system and if they are, both loyalty programs exchange the credits.
The system that is patent-protected under the name “Network Gaming System and Casino Management Link” is offered on a license basis to land-based casino operators “as a turnkey technology solution for real-money and social online gaming.”
GAN also claims in the lawsuit that MGM has been aware of this patent since 2016 when both parties discussed a deal related to GAN’s online gaming-software-as-a-service solutions and because of the operator’s long-running knowledge, what MGM Resorts did earlier this year “constitute induced and/or contributory infringement.”
MGM Rewards Linked with BetMGM Rewards
In February, MGM Resorts launched its new MGM Rewards program to replace its long-running M life Rewards program and a day later followed suit by introducing BetMGM Rewards, a loyalty program for customers of BetMGM, linking both programs and enabling the transfer of loyalty points between the digital and land-based management systems.
After the patent violation notice sent to MGM Resorts did not stop the casino and entertainment operator from continuing to infringe on GAN’s patent rights as protected by the US Patent and Trademark Office, GAN believes the only institution that is capable of stopping the infringement is the court.
For the willful infringing acts, GAN is seeking from the court relief of trebling of damages and/or exemplary damages for willful infringement, permanent injunction, attorneys’ fees and costs, as well as pre-and post-judgment interest and costs.
“MGM’s infringing acts have caused damage to GAN, and GAN is entitled to monetary relief in an amount to be determined at trial,” the legal filing reads.
The lawsuit was filed just a day before the release of GAN’s preliminary fourth quarter and full year 2021 financial results in which the company could not convince the markets and its share price dropped 18% in pre-market trading today.
The NASDAQ-listed technology solutions provider posted revenue growth in 2021 driven mainly by its B2C operations following the acquisition of Estonia-based sportsbook Coolbet and declared a gross profit of $84.1 million, yet net loss increased to $24.9 million, up from $20.2 million in 2020.