If casinos link their online and offline rewards, they may owe GAN some money

GAN Hires Law Firm To Enforce Patent Linking Online Gambling, Rewards Cards

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GAN has become one of the principal technology providers to US casinos over the last few years providing technology that links online and offline gaming systems.

The company patented its technology in US patent 8,821,296, and has since licensed its technology to Station Casinos, Chickasaw Nation, MGM Resorts, Ocean Resort Casino and Parx Casino.

Now GAN claims that other casino companies are breaching its patent by deploying similar systems which breach GAN’s intellectual property rights. The company has appointed Irwin IP LLP to protect its interests.

What is GAN protecting?

The core element of the patent that GAN was awarded gives it intellectual property rights over systems that link online and offline loyalty rewards.

GAN explains:

“GAN’s US-patented technology principally permits US casino operators’ carded patrons to link their reward card to their online gambling account in order to identify themselves as a patron of the land-based casino and a member of their retail rewards program.”

The patent itself makes a number of “claims.” It is these claims which define the scope of GAN’s patent and therefore provide the legal standard for determining it its rights have been infringed.

The claims take the basic idea which is stated as:

“The present technology connects a network (e.g., Internet) based gaming system and one or more casino management systems (CMS) for managing patron data, loyalty programs, and other data.”

And then protect all the different ways in which the idea can be technically implemented.

As such, in theory, any casino which links its online rewards to its live casino rewards may be in breach of the patent.

Who are the targets of GAN’s action?

The press release does not specify any particular casinos as targets for litigation, but it’s a good guess that almost all the casinos which have started online gaming operations could be in their sights.

In particular, casinos that operate their online gaming under the same brand as their land-based operation.

Caesars immediately jumps to mind. Its Caesars online casino promo code integrates the company’s Total Rewards program so that online customers have rewards credited to the same account they use when they visit the live casino.

Any other casino which does the same thing can expect a letter from GAN’s lawyers.

Litigation is GAN’s last resort

Although the possibility of litigation is present, the motivation behind GAN’s appointment of Irwin IP is more likely to be a defensive measure.

In issuing a press release about the appointment, GAN is sending a warning to companies that it will not take lightly any patent infringements.

The action is as much a public service broadcast that casinos had better check that their systems aren’t in breach of GAN’s patent as it is a threat.

The statement reads:

“the Company will now proceed to assert its rights over US-patented intellectual property and seek commercial settlements for prior and continuing infringements by regulated Internet gambling operators and/or relevant technology vendors, who have been substantially and progressively placed on notice of the Company’s US intellectual property rights.”

In other words, GAN is following a gradual process of warning casinos to check their systems, then following up with some form of notification that there may be a patent breach.

This could lead to one of three outcomes:

  • The companies agree that there is no breach of intellectual property
  • The companies agree to a licensing deal with GAN
  • Or there is a dispute, in which case GAN will go to court

GAN has tested its patent

GAN’s confidence in making this announcement arises partly from the fact that it has already succeeded in defending its patent:

“The commencement of GAN’s Patent licensing program was announced on May 30, 2017 following an unsuccessful ‘ex parte’ (anonymous) legal challenge to GAN’s US patent number 8,821,296, reinforcing the value of GAN’s US-patented technology for linking land-based casino reward cards to online gambling accounts.”

A patent which has fought off a legal challenge is enormously more valuable than one which has not faced a court’s examination.

GAN’s strategy is to build on this reinforcement to encourage other casinos to join its licensing program.

The risk GAN takes is that it may well annoy some of its potential technology partners. Nevertheless, the payoff for having a broad patent in a critical area that casinos need if they are to succeed online may more than compensate.

- A former founder of Poker Industry Pro and Head of Content at PokerNews publisher iBus Media, Joss Wood is a graduate in English from the University of Birmingham. Joss also holds a master’s degree in Organisational Development from the University of Manchester. His career path has taken him from the British Army, through business and finance to seven years as a successful professional poker player.
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