Posted on: April 22, 2024, 03:58h.
Last updated on: April 22, 2024, 03:58h.
Digital payments company Koin Mobile has accused casino-supplier giant Everi of “abuse of its power … to stifle competition” in the emerging cashless-payments gaming market.
In an antitrust suit filed in Nevada’s federal court Friday, Koin claims Everi illegally forces casinos to employ its own digital payments product exclusively by tying them to its other services involving cash-access.
Everi supplies slot machines as well as financial equipment and services to casinos and has contracted with an overwhelming majority of operators in the US, according to the lawsuit.
The company now controls around 75% to 90% of cash-access transactions in land-based casinos across America, according to estimates.
Everi itself has reported delivering $25 billion to casino floors in 2017, more than $30 billion in 2019, and more than $40 billion in 2022.
‘Onerous Contracts’
But it has cornered the market by employing “onerous,” long-term exclusive agreements that prevent operators from engaging with other digital wallet providers with superior products, the lawsuit claims.
Everi has executed a tying strategy by which it imposes on casinos a complex, exclusive adhesion contract for cash-access products — lasting for a minimum of five years with automatic renewals, rights of first refusal, and onerous forfeiture provisions — and sneaks or otherwise forces its cashless or ‘quasi-cash’ products into the long-term exclusive arrangement, as a condition to receiving Everi’s cash-access products,” the complaint asserts.
Digital wallets are relatively new to the land-based gaming industry and operate much like Paypal or Venmo in the non-gaming world, but with added features specific to the highly regulated casino industry.
They enable patrons to fund their gambling without the need for cash by linking external funding sources like credit cards and bank accounts to smartphone apps that can then interface with casino-management systems.
Koin Flips
Koin has a product called Koin Wallet that competes with Everi’s CashClub Wallet. The lawsuit claims the Koin product is a threat to Everi’s market dominance, and the larger company has attempted to suppress competition as a result, interfering with Koin’s casino business relationships.
Everi’s planned merger with multinational gaming supplier International Game Technology (IGT) will further cement that market dominance, Koin said in the lawsuit.
“The post-merger Everi will thus have far-reaching control over the digital-wallet markets, with the ability unilaterally to lock in customers, lock out competitors, and increase pricing to casinos and patrons while delivering a sub-par product.”
The lawsuit seeks “tens of millions” in damages for lost profits and business opportunities.
