CZR in trouble
On, Nov 6th, Deutsche Bank comments that "Given our view of risks (debt levels, deferred spend, development execution, and competition), we see shares as fairly valued at present. Our Hold rating is unchanged."
However, a lawsuit, which was filed on Nov 5th in the United States District Court for the Southern District of Mississippi (Jackson Division), alleges the defendants Caesars Entertainment Corporation, MGM Resorts International, Inc., WMS Gaming, Inc., Penn National Gaming, Inc. and Aruze Gaming America, Inc. either manufacture, sell or lease gaming systems in violation of MGT Gaming's patent rights, or operate casinos that offer gaming systems in violation of MGT Gaming's patent rights.
MGT estimates that each group play slot machine generates about $4000 per day in revenue for the casinos, or $1.46 million annually. With 10,000 allegedly infringing machines, the annual revenue for casinos is $14.6 billion. If the defendants like CZR were to pay MGT a 1% royalty, MGT could receive $146 million annually, or $1.46 billion over the 10 year life of the patent (before taxes and legal fees). So, it will definitely have a negative effect on CZR. |
