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Man behind FOBT curb wins case against machine manufacturer 14/08/18
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• Scientific Games ordered to pay $315m in damages after US court finds in Derek Webb-backed litigation’s favour

The man behind a successful campaign to reduce stakes on fixed-odds betting terminals (FOBTs) has scored a second victory over the machines’ biggest manufacturer, after a court ordered the company to pay damages of $315m (£244.5m).

Derek Webb, 68, who funded the anti-FOBT Fairer Gambling group, is expected to pocket tens of millions personally after agreeing to back litigation against Scientific Games.

It comes after the company, which has made millions from UK gamblers’ FOBT habit, lost a courtroom battle over patents for automatic card-shuffling machines used in casinos.

Scientific Games’ subsidiary Shuffle Master was deemed by a US judge to have launched a sham lawsuit to damage the firm behind a rival shuffling machine.

The company said it would appeal the ruling, which marks the second battle this year in which Webb has proved a thorn in the side of FOBT manufacturers.

Scientific Games’ subsidiary SG Gaming is one of just two companies that manufacture hardware and software for the UK’s network of 33,581 FOBTs, which take an average of more than £50,000 from gamblers each year.

The Fairer Gambling group played a pivotal role in the campaign that saw maximum stakes on the machines reduced from £100 to £2, with minister labelling them a “social blight”.

Webb’s history as a professional poker player and casino game inventor triggered allegations from some parts of the bookmaking industry that he was looking after the interests of casinos, rather than seeking to protect problem gamblers.

He refused to reveal his share of the $315m payout but said it exceeds his biggest proceeds from any single scenario.

“It was an investment, it was a bet, to the extent that I knew I’d got the best of it and knew the other player was a weak player and our hand was stronger,” he added.

The courtroom tussle began in 2012, when Shuffle Master sued smaller rival Shuffle Tech, alleging infringement of patents. Shuffle Master was later bought by Scientific Games, while Shuffle Tech went bankrupt.

Webb subsequently agreed to fund a lawsuit hinging on the allegation that Shuffle Master was guilty of sham litigation based on fraudulent patents, in order to secure a monopoly.

A jury awarded $105m in damages, but the sum was tripled due to a quirk of the legal system in which awards are multiplied if the plaintiff is deemed to be assisting the US government in the prevention of anti-competitive behaviour.

Scientific Games is understood to have offered a settlement that the plaintiffs considered too low.

Webb said: “How could the defendant be so complacent, ignorant and arrogant that it could not find a way to offer a reasonable settlement to this bunch of nobodies?”

Webb has previously made millions of dollars from patent lawsuits involving the gambling industry, including around $20m from a dispute linked to Three Card Poker, a game he invented and sold to casinos.

Four years later he made $23m by selling his casino gaming firm Prime Table to Galaxy Gaming, in which he owns a stake.

Webb has previously said that he has spent around £3m to fund the Fairer Gambling campaign against FOBTs, prompting allegations from some bookmakers that he is acting in the interests of casinos hoping to lure gamblers away from high-street bookmakers.

“It’s evil of them to make this assertion,” he said.

“It’s dog-whistle code for saying there’s something wrong with the campaign. Their willingness to continue with that nonsense means nobody should listen to them about anything they ever say.”
 
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