Legal Battle Over ‘Dragon Train’ Could Cost Light & Wonder Up to $150M

Light & Wonder Inc. (L&W) could lose at least $50 million because of legal issues with its “Dragon Train” slot game, experts say. 

Aristocrat Halts L&W’s ‘Dragon Train’ Sales Amid Costly Lawsuit

Aristocrat Technologies Inc. started a lawsuit saying L&W’s game copies parts of Aristocrat’s popular “Dragon Link” series. In September, Aristocrat won a court order to stop “Dragon Train” sales in North America. The fight, which started in March, has people worried about how much money L&W might lose overall.

B. Riley Securities analyst David Bain sent out a note with some estimates. He thinks L&W might have to pay around $28.6 million to replace all the “Dragon Train” units currently running in North America. But that is not all. When you add in legal costs and damages, L&W could end up shelling out between $50 million and $150 million in total.

L&W’s president and CEO, Matt Wilson, stated that the company is following the court order to remove about 2,000 “Dragon Train” units from North American markets. Wilson also shared that they plan to create a new version of the game, which might be called “Dragon Train 2.0.” The company wants to cause as little disruption as possible by swapping out the current units with updated ones.

In his memo, Bain highlighted that L&W no longer sells the game in Australia where they sold 4,800 units. The analyst suggested that L&W might face an extra cost of $62.4 million if they had to replace the Australian units too. Bain’s analysis shows that each replacement unit, including installation costs about $13,000.

Bain Remains Optimistic About L&W’s Future Despite Legal Setbacks and Stock Drop

Despite these setbacks, Bain still feels good about L&W’s future prospects. He thinks the market overreacted to the legal decision. He pointed out that while L&W’s stock dropped 17%, Dragon Train made up less than 5% of the company’s expected earnings for 2025. Bain mentioned that L&W keeps confirming its 2025 EBITDA goal of $1.4 billion, with Dragon Train set to add about $70 million to that number.

Bain also stressed that L&W’s efforts to build customer relationships and replace games have paid off. He thinks most customers will likely accept the new game versions helping the company make a smooth transition.

Looking to the future, Bain noted that L&W still has an advantage from its diverse range of products, including its SciPlay division, which has done better than rivals in social casino games. He ended by saying that L&W’s market standing is still solid, backed by its current growth plans and the recent mergers in the industry that have cut down on competition.