Light & Wonder may find itself back in a bit more hot water as Aristocrat’s legal fight over the Dragon Train slot series appears to be spilling into a second game franchise.
According to analysts over at Macquarie, Light & Wonder’s Jewel of the Dragon series is now getting the legal treatment due to similarities with Aristocrat’s popular Dragon Link titles.
The dispute, originally centered around Dragon Train, escalated last year when a U.S. District Court in Nevada granted Aristocrat a preliminary injunction, halting all U.S. sales and distribution of the game.
The court found that Light & Wonder was “extremely likely” to have misappropriated trade secrets in the game’s development.
Now, Jewel of the Dragon, which is a smaller title within Light & Wonder’s portfolio, has made its way into the same legal filings, raising questions about whether it also crosses the line into copyright infringement.
Aristocrat’s original complaint which was filed in June 2024, cited specific similarities between Jewel of the Dragon: Red Phoenix and Dragon Link: Autumn Moon, including identical jackpot layouts, logos, and bonus features such as the Hold and Spin mechanic.
Despite potential legal complications, Macquarie analysts say the financial exposure from Jewel of the Dragon is minimal.
Unlike Dragon Train, which sold over 10,000 units in Australia alone, Jewel of the Dragon has a much smaller installed base. “This could cause some friction with customers,” Macquarie noted, “but it’s unlikely to derail Light & Wonder’s path to its $1.4 billion 2025 EBITDA target.”
Light & Wonder, meanwhile, has not publicly commented on the aforementioned litigation but instead reiterated its confidence in long-term performance.
CEO Matt Wilson suggested that the company is “already working on new iterations” of the Dragon Train franchise that comply with the court’s ruling, while also stressing that the company is committed to innovation beyond any single game.
Still, the brewing legal fight hasn’t gone unnoticed by investors. Light & Wonder’s share price has dropped nearly 20% in recent days amid speculation of further legal trouble.
Adding to the pressure, Aristocrat claims Light & Wonder has failed to provide a complete list of games involving former Aristocrat employee Emma Charles, who is at the center of the misappropriation claims.
They argue that Jewel of the Dragon also benefits from trade secrets taken during her transition to Light & Wonder.
Despite these legal headwinds, analysts believe the real damage may be reputational more than financial.
The core concern is whether continued litigation could strain Light & Wonder’s relationships with casino clients and regulators, particularly in the U.S., where compliance standards are under increasing scrutiny.
Aristocrat is showing no signs of backing down by seeking damages under the U.S. Copyright Act for domestic and international profits tied to what it alleges are unauthorized copies of its games.
As for Light & Wonder, the company continues to bank on a diversified portfolio and a strong slate of upcoming titles to maintain momentum.
But with two of its slot franchises now heavily under a legal microscope, the next few months could be the deciding factor on how long that momentum can last.
