Pre-market drops over 15%! Light & Wonder (LNW.US) products are banned

Shares of US gaming giant Light & Wonder (LNW.US) plunged before the US market opened on Tuesday after an earlier Nevada district court granted a preliminary injunction against its rival Aristocrat regarding Light & Wonder's "Dragon Train" series of gaming products.

Light & Wonder, which is primarily a manufacturer of electronic gaming machines that sells them to bars, clubs and casinos, responded in a statement by saying, "We disagree with the judge's decision and will immediately appeal. We will continue to vigorously defend Aristocrat's allegations, including presenting our defense to a jury at trial."

The case was first filed in March this year, involving Aristocrat's allegations that "Dragon Train" is similar to its own "Dragon Link" series, and questioning the roles of former Aristocrat designers Emma Charles and Lloyd Sefton, who reportedly participated in the design of Dragon Link and reportedly led the development of Dragon Train.

According to a statement from Aristocrat, the court barred Light & Wonder "from continuing or planning to sell, lease or otherwise commercialize Dragon Train."

Aristocrat cited the Nevada court's ruling, which found that Aristocrat "is highly likely to succeed in proving that Light & Wonder stole Aristocrat's trade secrets in the development of Dragon Train."

Light & Wonder continued to respond by saying that the company is advancing a series of critical initiatives to mitigate the direct impact of the order and any ongoing business disruption, and reiterated its $1.4 billion consolidated EBITDA target for 2025.

Since the beginning of this year, Light & Wonder's stock has fallen by 37%, and it fell more than 15% before the market opened on Tuesday.