IGT Announces Double Down Legal SettlementSettlement Is Worth $415 Million |
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IGT announced that it has resolved a lawsuit related to its sale of its social casino business.
International Game Technology and DoubleDown Interactive Co. on August 29 announced an agreement in principle to settle the Benson v. DoubleDown Interactive LLC, et. al. lawsuit and associated proceedings. The consumer protection case involved Washington State and Double Down’s use of “play” chips for online gambling.
IGT completed the sale of DoubleDown Interactive LLC, the operator of social gaming business DoubleDown Casino, to DoubleU Diamond LLC, a subsidiary of DoubleDown, in June 2017.
The agreement in principle, entered into by certain subsidiaries of IGT and DoubleDown, remains contingent on final court approval by the U.S. Federal District Court for the Western District of Washington.
Under the terms of the settlement, which take effect only after final court approval of the proposed class settlement:
A total of $415 million will be paid into a settlement fund of which IGT’s subsidiaries will contribute $269.75 million and DDI will contribute $145.25 million.
All members of the nationwide settlement class who do not exclude themselves will release all claims relating to the subject matter of the lawsuit. Subject to final court approval of the settlement, IGT and DoubleDown have also resolved all indemnification and other claims between themselves and their respective subsidiaries and affiliates relating to the litigation.
As a result of the settlement agreement, IGT will accrue a $119.75 million non-operating expense in the third quarter related to the incremental loss associated with the litigation and related claims between IGT and DoubleDown and their respective subsidiaries and affiliates. In the second quarter, $150 million was accrued.
In 2017, IGT agreed to sell its social casino subsidiary, Double Down Interactive, to an affiliate of DoubleU Games, a leading global social casino operator headquartered in Seoul, South Korea.
“Since acquiring DoubleDown in 2012, IGT has grown it into one of the largest and most successful brands in the North American social casino market,” said Marco Sala, CEO of IGT, said at the time. “After several years of strong, organic growth and increasingly attractive valuation levels, the time is right for us to maximize the value of this asset for our shareholders. We will continue participating in the growth of the social casino market through our multi-year, strategic partnership with DoubleU Games.”
The cash purchase price was $825 million.
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