Light & Wonder Surges After Court Limits Disclosures in Aristocrat Suit

• Court ruling limits disclosures Light & Wonder must make to Aristocrat
• Judge says Aristocrat must identify specific trade secrets its attempting to protect

Shares of Light & Wonder (NASDAQ: LNW) soared Wednesday after the company won a favorable court ruling in slot machine litigation brought by rival Aristocrat Technologies.

In late trading Wednesday, Light & Wonder was higher by 9.46% after the US District Court for the District of Nevada ruled L&W doesn’t have to disclose the math models underpinning hold and spin gaming machines, and that Aristocrat must make clear the trade secrets it’s attempting to protect. Aristocrat brought the suit in 2024, claiming L&W’s “Dragon Train” slots are highly similar to its own “Dragon Link” games.

Analysts have said the litigation has been an overhang on Light & Wonder stock, but there are signs those clouds are clearing as highlighted by Wednesday’s rally and the point that the stock was up 9% year to date entering today.

Aristocrat/Light & Wonder Trial Scheduled for 2026

In its latest ruling, the US District Court for the District of Nevada ordered Aristocrat and Light & Wonder to meet and discuss the latest decision, which is part of a discovery process for a trial slated for 2026.

In a note to clients on Wednesday, Jefferies analyst David Katz described the suit as “background noise” for both Aristocrat and Light & Wonder – the two dominant suppliers of slot machines in North America and other markets. He adds that in this industry, intellectual property lawsuits are common, though the Aristocrat/Light & Wonder matter gained more prominence than usual.

First, LNW indicated that one of its core strengths is its game development studios, some of which were successful at other companies including ALL,” wrote Katz. “Second, the matter turned out to be somewhat larger than LNW originally indicated. Third, the competition between the two companies is intense, given their positioning as the only two large-scale game developers globally and the number of people at LNW that were formerly at ALL.”

Katz rates shares of Light & Wonder “buy” with a $116 price target, implying potential upside of 35% from the June 24 close.

Ruling Comes Amid Changes at Light & Wonder

The court ruling emerged soon after Light & Wonder announced changes to its in-house legal team. The company recently said Chief Legal Officer James Sottile, who’s been with the firm since 2018, will leave at the end of this year. He’ll be replaced by Susan Dawson.

There’s speculation that the Aristocrat litigation coupled with a patent infringement suit brought in Nevada by Evolution Gaming prompted the changes to Light & Wonder’s internal legal team.