Light & Wonder Provides Update on Dragon Train Litigation

Reaffirms 2025 $1.4 Billion Targeted Consolidated AEBITDA⁽¹⁾ and Targeted Adjusted NPATA Range⁽¹⁾ between $565 million and $635 million⁽²⁾

Company to Host Conference Call at 4:30 PM Eastern Time

LAS VEGAS – April 2 , 2025 – Light & Wonder, Inc. (NASDAQ and ASX: LNW) (together with its subsidiaries, “we,” “Light & Wonder,” “L&W” or the “Company”) today provided an update regarding its ongoing litigation with Aristocrat in the U.S. District Court of Nevada.

On March 14, 2025, Aristocrat filed a second amended complaint with the District Court of Nevada, adding a trade secret misappropriation claim against Jewel of the Dragon. The initial claims concerning Jewel of the Dragon did not include a claim for trade secret misappropriation. We intend to respond to the second amended complaint by April 11, 2025.

In the latest complaint, Aristocrat has also raised new issues, which we intend to vigorously defend against.

First, Aristocrat asserts that replacement games for Dragon Train, including Dragon Train Grand Central, a social game we have released, would “reap the benefits” of trade secret misappropriation even if none of the claimed trade secrets are used in such games.

• There are many elements of Dragon Train that made it successful and that are not contested by Aristocrat. We have structured development of new games to solve the issue raised by Emma Charles’ use of certain math in the design of Dragon Train.
• We have been and will continue to be transparent with the courts and Aristocrat on the process to ensure that new games do not contain any of Aristocrat’s claimed trade secrets or confidential information. We followed that process with our new social game, Dragon Train Grand Central. We provided the math to Aristocrat in advance of the launch of the game.
• Aristocrat has made no claim with respect to the Dragon Train Grand Central math, and we are confident the same will be true for our Dragon Train replacement land-based game that is in development.

Second, Aristocrat’s complaint also refers to emails sent by Emma Charles, the game designer of Dragon Train, to other team members at L&W that were provided to Aristocrat as part of the discovery process.

• We have investigated the circumstances surrounding these e-mails and have not identified any evidence of similar issues affecting games of other studios related to these e-mails.

Third, Aristocrat references an unreleased game in its latest amended complaint.

• The game in question was part of our pipeline of products. Our internal review processes identified that an early version of this game’s math model potentially presented issues relating to Aristocrat. While these issues had been removed in later versions, we took a conservative position and acted promptly prior to this amended complaint to stop further development of the game and will not be releasing it.

Finally, Aristocrat has for the first time made a trade secret misappropriation claim on Jewel of the Dragon.

• In light of this claim, we made the decision to voluntarily stop commercializing and offer to replace Jewel of the Dragon to minimize any confusion and potential disruption to our customers. We are seeking to ensure our customers are not affected by the ongoing legal process. The success we had in rapidly replacing the Dragon Train units, and the strong game performance of our broader portfolio, give us confidence that this is the best course of action for our customers at this point as we continue to build great games. For context, Jewel of the Dragon’s Premium installed base footprint is less than one percent (1%) of the total Premium installed base in North America, with approximately 150 premium leased units.
• After Aristocrat added the trade secret claim on Jewel of the Dragon, we identified certain Aristocrat PAR sheets dated 2015 that appear to have been available to certain members of the Jewel of the Dragon development team. PAR sheets are used by suppliers to describe the performance characteristics and settings of a slot machine and contain information about the game’s payout structure and odds and some of the mechanics of how the machine operates. These PAR sheets have been historically provided to customers to allow them to meet regulatory requirements and to understand their own exposure as it relates to the likelihood of large but infrequent award amounts. Because PAR sheets have been so widely distributed, it has historically been common for PAR sheets from industry players, including L&W, to end up in the hands of competitors.
• Given our identification of these historical Aristocrat PAR sheets, we are expanding the scope of the review we conducted following the preliminary injunction to include all hold and spin games released before mid-2021. We have no reason to believe that the expanded review covering all hold and spin games released before mid-2021 will identify evidence of similar issues. The scope of our initial review included a number of later versions of games first released before mid-2021. None of those later versions had evidence of similar issues making it unlikely that earlier versions would. Furthermore, all of these games have been on the market for a minimum of three years. Separately, no one has made a claim that any of these games incorporate confidential trade secrets of any other party. We plan to give an update to the market on this review as part of our Q1 2025 results briefing.

We remain steadfast in our commitment to continued R&D investment to further develop our catalog of proven, evergreen franchises. The broad uplift in game performance we’ve experienced across our portfolio is a testament to the quality of the talent and culture in our organization. We are extremely proud to have a robust and diversified portfolio of the best products in the market that gives us a competitive advantage not tied to any one game or franchise. We are grateful to our customers and stakeholders for their unwavering support as we continue to execute to strategy.

Reaffirms 2025 Financial Targets

Most importantly, our decision to stop commercializing and offer to remove Jewel of the Dragon is not expected to have a material effect on our revenue, nor our commitment to delivering our $1.4 billion Targeted Consolidated AEBITDA^([3]) and Targeted Adjusted NPATA range⁽¹⁾ between $565 million and $635 million for 2025 and is not expected to affect our future growth. These financial targets are affirmed without any contribution from the proposed acquisition of Grover Gaming’s Charitable business, which we expect to close during Q2 this year. We look forward to sharing new strategic objectives at our upcoming 2025 Investor Day.

Additional Background Regarding the Litigation

Aristocrat originally made claims with respect to two Light &Wonder games in its complaint filed on February 26, 2024, a trade secret misappropriation claim on Dragon Train and trade dress, copyright infringement and related claims on Jewel of the Dragon. In its first amended complaint filed in July 2024, Aristocrat added references to trade dress issues relating to Dragon Unleashed Link.

On September 23, 2024, the Nevada court granted a preliminary injunction on Dragon Train games. We complied with that order on a global basis, including converting out approximately 95% of the 2,200 units from our North American gaming operations fleet within the 30-day time period for compliance. Following our own internal review, we also found that Emma Charles, the game designer responsible for Dragon Train, had breached her employment obligations and we swiftly terminated her employment.

Following the Nevada court preliminary injunction ruling and our internal review, we decided to undertake a broad third-party audit by Mark Nicely, a gaming expert and former game mathematician with deep experience in the industry. He has been involved in design, development and analysis of casino games since 1997. From 2005-2014, he was an employee of IGT working on a wide range of game design and development projects and analysis of IP portfolios. He has been named as a lead or co-inventor on more than 250 issued patents. For the last four years, Mark has worked as a freelance game designer, mathematician and analyst and as an expert witness on matters involving casino game design, gaming IP, casino operations and gaming contracts. Mark earned a Bachelor of Science in Computer and System Engineering from Rensselaer Polytechnic Institute in 1983 and worked in various computer engineering roles until 1997.

That review has not identified any evidence of similar issues for hold and spin games released from mid-2021, when Emma Charles joined Light & Wonder, through to the present.

As previously announced, we are hosting an investor conference call and simultaneous webcast with the event details listed below.

Investor Conference Call

April 2, 2025
4:30 p.m. U.S. Eastern Time / 1:30 p.m. U.S. Pacific Time

April 3, 2025
7:30 a.m. Australian Eastern Daylight Time

To pre-register, click here: Light & Wonder Litigation Update Conference Call

Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to the call start time.

Webcast

To access the live webcast of the call, please visit the Company’s website at https://explore.investors.lnw.com and click on the webcast link. A replay of the webcast will be available approximately one hour after the webcast and will be archived on the Company’s website.

Telephone Dial-in

US Toll Free: +1 (833) 470-1428
Australia: +61 2 7908 3093
International: +1 (404) 975-4839
Access Code: 604986

Company Contacts

Media Relations

Andy Fouché +1 206-697-3678
Vice President, Corporate Affairs and Communications
media@lnw.com

Investor Relations

Nick Zangari +1 702-301-4378
Senior Vice President, Investor Relations and Treasury
ir@lnw.com

(1) Represents a non-GAAP financial measure. Additional information on non-GAAP financial measures presented herein is available at the end of this release.

(2) Targets reaffirmation does not include any contribution from the proposed acquisition of Grover Charitable Gaming business.