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Alliance must pay IGT $7.3 million for patent violation

Sep 28, 2004 9:26 AM

A federal district court jury Monday ordered Alliance Gaming Corp. (AGI) to pay $7.371 million to Action Gaming Inc. and International Game Technology (IGT) for infringing on a pair of patents involving multi-hand poker machines.

The company said the jury award related to "a single optional feature" offered on certain machines developed by United Coin, a former subsidiary of the company.

"The verdict was not against Bally Gaming," the company said, adding that "it is not anticipated to impact any gaming machines or systems sold by Bally Gaming and Systems."

Because of the judgment, Alliance Gaming said it would take a first-quarter charge of $0.09 per share.

According to analysts surveyed by Thomson First Call, the company is expected to earn $0.11 per share during the fiscal first quarter whose period will end on Sept. 30.

Dave Johnson, IGT senior vice president and general counsel, said, "We are very pleased with the jury’s validation of our patents in this case. IGT has always vigorously defended its intellectual property and will continue to do so against any potential violators whenever it is appropriate."

Actually, the patents cover multi-hand games including "Triple Play Poker," that were developed by Ernie Moody, founder of Action Gaming. IGT recently purchased Action Gaming and the rights to its patents.

Bankruptcy action

The Bankruptcy Court has taken action on several petitions presented to the court in motions heard last week involving American Wagering Inc. (BETMQ) and its wholly owned subsidiary, Leroy’s Horse & Sports Place, Inc.

Approved by the court was a recent settlement agreement involving Michael Racusin and American Wagering that resolved financial payment for a successful suit brought against the company by Racusin.

The court also approved several dates regarding the bankruptcy action permitting the shareholders to vote on the reorganization plan.

Also permitted by the court will be competing plans of reorganization should they be filed with the court.

OK for Churchill

Churchill Downs Inc. (CHDN) has won the right to purchase the Fair Grounds racetrack in New Orleans with its bid of $47 million. Included in the purchase are the track, formerly owned by the Krantz Family, and 10 off-track betting parlors.

The track was placed in bankruptcy following a judge’s ruling that the horsemen’s purse account was shortchanged $90 million in video lottery terminal revenues. The horsemen later agreed to accept $25 million to settle the claim.

Acting for his family, CEO Bryan Krantz placed the track in bankruptcy and negotiated a buyout with several different companies.

Under the purchase agreement, Churchill Downs will own all of the track’s stock but Bryan Krantz will serve as board chairman for three years.

Contracts awarded

Scientific Games Corporation (SGMS) enjoyed a beneficial week with the announcement that it was the successful bidder for a pair of contracts.

The Iowa Lottery chose the company to provide instant-scratch tickets, a one-year contract valued at $1.4 million. Attached to the contract were four one-year extension options.

Also, the company said it had received a seven-year contract from Loteria Electronica de Puerto Rico for the installation of a new satellite and radio communication system. The contract was valued at $66.7 million.

Workers needed

A shortage of workers at their properties has prompted the operators of Connecticut’s two casinos to look out of the country for help.

Officials of Foxwoods Resort Casino and the Mohegan Sun have sent representatives to South America and South Korea looking for people, especially students, to come to the U.S. to work.

Last winter, both casinos hired Brazilian students to fill positions in their food, beverage and hospitality departments. The venture was so successful that the casinos are reaching out for more foreign workers.

THE INSIDER: A joint venture in which GTECH Holdings Corporation (GTK) has a 49% interest has been chosen as the preferred bidder for the online lottery service business needed by the Thailand Lottery.

Federal lawmakers are considering a bill that would add 990 acres of land controlled by the Bureau of Land Management to the reservation of the Pechanga Band of Luiseno Mission Indians.

MGM MIRAGE (MGG) has sold $450 million in 6% notes in a private placement.

Analysts at Thomas Weisel have downgraded the share of Caesars Entertainment Inc. (CZR) from outperform to peer perform.

Station Casinos Inc. (STN) will pay a $2.2 million fine to settle a complaint over failing to file certain financial reports required by Nevada gaming regulators.

Boyd Gaming Corporation (BYD) will conduct a conference call to review its 2004 third quarter business on Tuesday, Oct. 26 at l:30 p.m. PDT

The Maine Harness Racing Commission has postponed until Oct. 14 its decision on whether to approve the application of Penn National Gaming Inc. (PENN) for a racing license.