Mikohn settles lawsuit with partner

Wednesday, Dec. 5, 2001 | 10:42 a.m.

Las Vegas gaming supply company Mikohn Gaming Corp. has settled its claims against Las Vegas gaming control system developer Safegames Inc. over licensing rights to a gaming device.

Mikohn sued on Nov. 20 to stop Safegames and its two European shareholders -- Viktor Mayer of Austria and Michail Order of Germany -- from terminating, allegedly without justification, its exclusive rights to market a device called "Safe Jack" in the United States after they were paid more than $3.3 million in advance royalties for the rights.

The product is marketed by Mikohn as a component of its "TableLink" suite of products, designed to track play by table game players. Called "TableLink GT" by Mikohn, the Safe Jack system tracks cards as they are dealt out of a shoe to blackjack players. Wins and losses can be determined instantly, and the possibility of losses from dealer mistakes or cheating is reduced.

Mikohn sued the defendants in a pre-emptive strike after they notified Mikohn on Oct. 10 of their intention to recover at least $24 million in damages from Mikohn, which they had accused of failing to manufacture and deliver the device in the past three years.

But Charles McCrea, Mikohn's general counsel, said: "Safegames is no longer seeking the $24 million in damages. We dropped our lawsuit after Safegames agreed to acknowledge our licensing rights in the United States and that we were not in breach of the agreement."

"As a condition for Mikohn agreeing to give up exclusive rights to market Safe Jack worldwide except for the United States, Safegames agreed to repay the $3.3 million royalties to Mikohn over a period of eight years," he said.

McCrea said Mikohn currently does not have the Safe Jack system installed in any casino, but has the product available and is marketing the system as part of its TableLink system.

Safegames' Mayer confirmed the settlement was reached after Mikohn guaranteed it would market at least 300 units of the device in the United States over the next three years.

"This is an important step for all of us because since Sept. 11, labor costs became an issue for casinos in the United States as (they) always have been in Europe because of extensive taxes on gaming revenues, and in Australia because of legal restrictions on dealers accepting tips," he said. "Our products support security and can reduce human involvement to a minimum per table game."