International Game Technology (IGT) announced Monday an agreement in principle to settle the Benson v. DoubleDown Interactive lawsuit and associated proceedings. IGT completed the sale of DoubleDown Interactive –operator of social gaming business DoubleDown Casino– to DoubleU Diamond, a subsidiary of DoubleDown, in June 2017.
The agreement in principle to settle the suit, entered into by certain subsidiaries of IGT and Double Down, remains contingent on final court approval by the US Federal District Court for the Western District of Washington. Under the terms, a total of $415 million will be paid into a settlement fund of which IGT will contribute $269.7 million, and DDI will contribute $145.2 million.
All members of the nationwide settlement class who do not exclude themselves will release all claims relating to the subject matter of the lawsuit. And subject to final court approval of the settlement, IGT and DoubleDown have also resolved all indemnification and other claims between themselves and their respective subsidiaries relating to the matter.
As a result of the settlement agreement, IGT will accrue a $119.75 million non-operating expense in the third quarter related to the incremental loss associated with the Benson matters and related claims between IGT and DoubleDown, a press release explains. A total of $150 million was accrued in the second quarter.
The Benson v. DoubleDown Interactive suit concerns DDI’s social casino product, which the plaintiffs allege violated Washington State law. Former customers of DoubleDown launched a class action against the business, arguing that social casino games in which players can choose to purchase tokens that can be used for play were illegal gambling in Washington.
IGT had acquired DoubleDown in 2012, before selling it to DoubleU Games in 2017 and entering a long-term agreement to offer content on DoubleDown Casino. As a result, the lottery and gaming tech supplier ended up implicated alongside DDI in the lawsuit, which has gone through a number of stages in various courts.