IGT, Alliance settle patent suits

Gary Thompson

Friday, Sept. 24, 1999 | 10:51 a.m.

International Game Technology of Reno and Alliance Gaming Corp. of Las Vegas said today they've settled patent lawsuits and will work together to develop coinless slots.

The stock of IGT, the world's largest slot maker, was up 12.5 cents to $16.9375 a share in early afternoon trading today. Alliance, whose Bally Gaming unit controls about 9 percent of the North American slot market, was up 25 cents a share to $7.3175.

The two companies said they've agreed to cross-license patents that promote cashless gaming, a new trend that allows players to receive redeemable tickets, rather than coins, for slot play. The tickets, printed on banknote-type paper, can be exchanged for cash at cashier's cages or inserted in other coinless slots, which will also accept U.S. paper currency.

IGT has also granted Bally a license to use and further develop IGT's communications protocol on Bally's slots and computerized monitoring systems. In return, Bally has granted IGT a license to use Bally's patent covering similar data-dissemination technology.

The companies also said IGT has waived provisions in its agreements with Atlantic City casinos that would have barred Bally from installing wide-area progressives there. As a result, Bally will begin placing its Thrillions slots in Atlantic City and will drop its antitrust lawsuit against IGT there.

"This is a very significant agreement because coinless slots will be a revolutionary industry event promising huge savings of time and money," said Dave Ehlers, chairman of Las Vegas Investment Advisors Inc.

He said such slots eliminate the need for hard counts, in which casinos run coins through counting machines. Coinless slots don't require costly coin preparation, wrapping, transportation and security.

No coin fills of slots are necessary, thus providing for faster operation and payment to players. Ehlers also said his firm's surveys indicate customers like coinless slots for a more pragmatic reason, as well -- their hands don't get dirty from handling coins.